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THE 
ECONOMIC  BASIS 

OF 

AN   ENDURING   PEACE 


BY 

C.  W.  MACFARLANE,  C.E.,  Ph.D. 

EX-VICE-PBE8IDENT,   AMERICAN   ECONOMIC  ASSOCIATION 


PHILADELPHIA 

GEORGE  W.  JACOBS  &  COMPANY 

PUBLISHERS 


COPYRIGHT,  1918,  BY  C.  W.  MACFARLANE 


PRESS  OF 

J.  B.  LIPPINCOTT  COMPANY 

PHILADELPHIA 


•1       )  jr  *    w!»> 


.  w 


THE  ECONOMIC   BASIS 

OF 

AN   ENDURING   PEACE 

That  wars  have  ofttimes  been  due  to  the  pres- 
sure of  population  upon  subsistence  is  now  so  gener- 
ally recognized  as  to  have  become  a  commonplace 
in  our  historical  studies.  The  various  barbarian  in- 
vasions of  the  Roman  Empire  may  be  cited  as  due 
to  this  cause,  and  even  where  the  immediate  invaders 
came  from  the  fertile  plains  of  southern  Russia 
their  migration  is  held  to  be  the  result  of  the  pres- 
sure of  less  favored  people  upon  the  borders  of 
those  who  held  these  more  fertile  lands.  Nor  is  this 
pressure  of  population  upon  subsistence  restricted 
to  more  primitive  days  but  is  clearly  seen  in  the 
great  struggle  that  now  threatens  to  engulf  our 
modern  civilization.  For  is  it  not  true  that  insular 
England,  fearing  to  have  her  food  supply  cut  off, 
has  been  forced  to  maintain  a  great  navy  for  its 
protection  and  to  insist  that  Germany  shall  limit 
its  naval  programme  to  the  ratio  of  twelve  to  sixteen. 

With  the  growth  of  trade  and  commerce,  how- 
ever, the  direct  pressure  of  population  upon  sub- 
sistence has  ceased  to  play  quite  so  important  a  part 

S 


-r: :  THE  ECONOMIC  BASIS 

among  the  economic  causes  of  war.  For  with  their 
rise  the  control  of  the  trade  routes  soon  became 
such  a  fruitful  source  of  wealth  and  power  that 
nations  were  willing  to  accept  the  gage  of  battle 
to  secure  or  retain  control  of  these  routes,  and  so 
we  had  what  are  sometimes  called  "  trade  wars  '* 
in  which  the  struggle  was  no  longer  directly  for 
fertile  lands  or  food,  but  for  advantages  in  trade 
and  commerce.  This,  too,  plays  no  unimportant 
role  in  the  present  great  war  which  is  in  part  a 
struggle  to  secure  control  of  the  waterway  of  the 
Dardanelles  and  a  right  of  way  for  the  Bagdad 
Railway  to  the  Persian  Gulf. 

In  a  primitive  civilization,  a  large  percentage  of 
the  income  of  the  individual  is  expended  upon  food, 
while  in  a  more  advanced  society  where  the  range  of 
satisfactions  is  much  wider,  manufactured  goods 
play  a  more  important  part  and  so  absorb  a  large 
measure  of  the  total  income,  leaving  a  smaller  per- 
centage of  that  income  to  be  expended  upon  food. 
Under  these  circumstances  the  pressure  of  one  civi- 
lization upon  another  may  first  be  felt,  not  in  a 
scarcity  of  fertile  land  or  food  but  in  a  scarcity 
of  the  more  important  raw  materials  of  manu- 
facture, to  wit:  Coal  and  Iron.  From  this  it 
follows  that  if  any  one  nation  or  group  of  nations 
4 


OF  AN  ENDURING  PEACE 

can  secure  control  of  Europe's  supplies  of  coal 
and  iron  naught  can  prevent  such  a  combination 
from  conquering  the  industrial  and  political  hegem- 
ony of  Europe.  For  the  "  balance  of  power  "  in 
Europe  no  longer  rests  exclusively  upon  the  distri- 
bution of  its  fertile  lands  but  even  more  immediately 
upon  the  wise  distribution  of  its  supplies  of  coal  and 
iron.  In  brief,  if  Germany  should  emerge  from  the 
present  war  still  holding  possession  of  the  iron-ore 
of  Lorraine  as  well  as  her  409  billion  tons  of  coal, 
naught  can  prevent  her  from  so  growing  in  wealth 
and  population  as  ultimately  to  conquer  the  hegem- 
ony of  Europe,  while  France,  restricted  to  her  pres- 
ent beggarly  holdings  of  17  billion  tons  of  coal, 
must,  despite  her  heroic  struggle  and  her  appalling 
sacrifice  of  blood  and  treasure,  disappear  as  a 
great  power  and  at  last  be  forced  to  bow  a  servile 
knee  to  the  Baal  of  German  Imperialism.  It  is  to 
the  further  exposition  of  this  thesis  in  connection 
with  the  coal  lands  of  Europe  that  the  first  part 
of  the  present  paper  is  devoted. 

The  reader  is  doubtless  aware  of  the  fact  that  up 
to  the  end  of  the  first  half  of  the  eighteenth  cen- 
tury English  economic  writers  were  quite  generally 
persuaded  that  England  had  reached  the  limit  of  her 
possible  population  at  about  eight  millions  of  people. 

5 


THE  ECONOMIC  BASIS 

The  great  industrial  revolution,  however,  that  came 
in  with  the  introduction  of  steam,  changed  all  this, 
and  England  passed  with  great  rapidity  from  an 
agricultural  to  an  industrial  or  manufacturing 
economy,  with  the  result  that  to-day  she  supports 
thirty-eight  millions  of  people,  though  she  still  con- 
tinues to  grow  but  little  more  than  enough  to  feed 
the  original  eight  million. 

The  men  who  guided  the  fortunes  of  Germany 
at  the  conclusion  of  the  war  of  1870-71  saw  quite 
clearly  that  their  country,  surrounded  as  it  was 
by  hostile  nations,  must  find  means  to  grow  in 
both  wealth  and  population  if  she  would  in  the 
future  successfully  meet  a  great  combined  attack. 
The  very  interesting  English  experience  was,  of 
course,  well  known  to  these  German  publicists, 
and  so  we  find  them  resorting  to  every  possible 
device,  like  protective  tariffs,  etc.,  to  encourage 
the  expansion  of  their  industries,  until  to-day  she 
is  pressing  hard  upon  the  heels  of  English  manu- 
facturers and  merchants  in  all  the  marts  of  the 
world.  Note,  too,  that  during  this  time  her  popu- 
lation has  grown  from  about  forty  million  at  the 
close  of  the  war  of  1870-71  to  approximately 
seventy  million  to-day,  while  for  three  years  she 
has  succeeded  in  financing  a  world-wide  war. 
6 


OF  AN  ENDURING  PEACE 

It  hardly  need  be  urged  that  the  expansion  of  the 
population  of  any  country  to  a  point  greatly  in  ex- 
cess of  its  home-grown  supply  of  food  may  be  at- 
tended with  serious  danger  in  the  event  of  a  great 
war.  As  we  have  already  written,  it  is  largely  for 
this  reason  that  England  is  forced  to  maintain  a 
great  navy,  and  to  regard  as  a  serious  menace  the 
rapid  growth  of  the  German  navy,  for  should  the 
latter  become  strong  enough  to  sweep  the  British 
fleets  from  the  sea,  England  could  quickly  be 
starved  into  submission  and  so  become  little  more 
than  a  vassal  state  of  Germany. 

The  refusal  of  Germany  to  enter  into  an  agree- 
ment with  England  for  the  limitation  of  their  naval 
armaments  has  been  rather  severely  criticised  by 
the  champions  of  English  interests.  In  reality, 
however,  this  refusal  was  entirely  rational  since 
England  insisted,  as  was  quite  natural  for  her  to 
do,  on  an  agreement  by  which  she  could  always 
maintain  her  preponderance  in  naval  power.  If 
Germany  could  still  have  hoped  to  grow  enough 
food  within  her  own  borders  to  feed  her  rapidly 
increasing  population,  the  case  would  of  course 
be  quite  different,  but  her  growth  in  industry  and 
population  had  rendered  her  vulnerable  to  a  naval 
attack  that  would  cut  off  her  imports  of  food.  It 
is  true  that  Germany  still  grows  more  than  70  per 

7 


THE  ECONOMIC  BASIS 

cent,  of  her  food  supplies,  while  England  has  been 
growing  about  30  per  cent,  of  the  food  consumed 
within  her  borders;  but  with  the  continued  growth 
of  German  industry  and  population,  she,  too,  must 
ere  long  approximate  the  conditions  that  now  obtain 
in  England,  and  hence  it  was  quite  in  order  for  her 
to  refuse  to  accept  a  naval  progranmie  that  must 
forever  leave  her  food  supply  at  the  mercy  of  Eng- 
land. In  a  word,  there  is  here  a  conflict  of  economic 
interests  so  serious,  so  fundamental  that,  as  men 
are  still  constituted,  the  only  solution  they  can  find 
for  the  difficulty  is  in  the  arbitrament  of  war. 

The  great  increase  in  the  wealth  and  population 
of  England  in  the  eighteenth  century,  as  of  the 
wealth  and  population  of  Germany  in  the  nineteenth 
century,  was  clearly  due  to  their  transition  from 
an  agricultural  to  an  industrial  or  manufacturing 
economy.  If  then  France  is  to  keep  pace  with 
Germany  in  her  resources  of  men,  money  and  arms, 
she  too  must  bring  about  a  like  expansion  of  her 
industry  and  commerce.  It  is  therefore  important 
to  note  that  the  industrial  expansion  in  England 
that  came  in  with  the  introduction  of  steam,  was 
conditioned  upon  her  having  a  generous  supply  of 
cheap  coal  with  which  to  make  that  steam.  So,  too, 
the  industrial  expansion  of  Germany  rests  in  last 
resort  upon  the  fact  that  she  is  generously  endowed 
8 


OF  AN  ENDURING  PEACE 

with  cheap  coal.  When,  therefore,  the  necessity  for 
a  further  industrial  expansion  is  urged  upon  the 
public  men  of  France,  a  serious  difficulty  is  en- 
countered, for  as  we  have  already  learned,  this  fair 
land  is  but  poorly  supplied  with  coal. 

The  poverty  of  France  in  this  regard  will  be 
brought  into  clear  relief  by  the  following  statement 
of  the  distribution  of  coal  in  the  various  countries  of 
western  Europe.  While  Germany  has  an  estimated 
supply  of  some  409  billion  tons,  England  has  an 
estimated  supply  of  189  billion  tons.  Again,  while 
Austria-Hungary  has  some  55  billion  tons,  France 
and  Belgium  taken  together  have  only  28  billion  tons 
(17  billion  in  France  and  11  billion  in  Belgium).* 

This  brief  statement  serves  to  show  not  only  the 
essential  weakness  in  the  industrial  outlook  of 
France,  but,  as  well,  the  strongly  intrenched  posi- 
tion of  German  industrialism  behind  its  409  billion 
tons  of  coal.  There  is,  however,  an  interesting  ele- 
ment of  weakness  in  the  geographical  location  of 
the  two  great  German  coal  fields,  160  billion  tons 
being  in  Silesia  on  her  eastern  frontier,  and  a  like 

*  These  figures  are  the  results  of  the  recent  careful 
drilling  of  the  coals  lands  of  Europe  to  a  depth  of  from 
1500  to  1800  feet.  See  "The  Coal  Resources  of  the 
World,"  a  work  initiated  by  the  Toronto  Congress  of 
Geologists  in  1913. 

9 


THE  ECONOMIC  BASIS 

amount  in  Westphalia  close  to  her  western  frontier, 
and  in  addition  the  small  but  important  coal  fields 
lying  west  of  the  Rhine.  Now  in  the  event  of  the 
defeat  of  Germany  in  the  present  struggle,  it  will 
clearly  be  impossible  for  her  to  satisfy  the  claims  of 
her  conquerors  by  any  money  indemnity  such  as  she 
exacted  from  France  in  1871,  for  if  Germany  is 
vanquished  it  will  only  be  after  she  has  been  reduced 
to  a  hopelessly  impoverished  condition.  In  that 
event  her  only  available  assets  will  be  f oimd  in  these 
coalfields  (Plate  I). 

Here,  then,  in  the  expropriation  of  a  part  of 
these  western  coal  fields,  France  will  have  an  oppor- 
tunity to  strengthen  her  industrial  position  at  the 
point  of  its  great  weakness,  for  with  this  possible 
increase  in  her  supply  of  coal,  together  with  the 
great  beds  of  iron  ore  that  lie  within  the  borders  of 
Lorraine,  there  would  be  nothing  to  prevent  a  great 
expansion  of  her  industries,  and  a  consequent  growth 
in  wealth  and  population  that  would  ere  long  make 
her  a  formidable  competitor  of  Germany  in  industry, 
commerce  and  war. 

The  Westphalian  coal  field,  lying  in  the  valley 
of  the  Ruhr,  has  its  western  end  near  Duisburg  on 
the  Rhine,  some  twenty-five  miles  from  the  Bel- 
gian frontier,  and  its  eastern  end  in  the  neighborhood 
of  Dortmund,  about  sixty-five  miles  from  the  same 
10 


scale:    %INCH  =  20MILES 
ROADS      QSJ    IRON  MINES     ^COALFIELDS 


Plate  I 


OF  AN  ENDURING  PEACE 

frontier.  Here,  in  an  area  of  fifteen  by  forty  miles, 
we  have  one  of  the  greatest  coal  fields  of  the  world. 
Situated,  as  it  is,  within  a  few  miles  of  the  Belgian 
frontier,  it  might,  in  the  event  of  the  defeat  of  Ger- 
many in  the  present  war,  afford  an  easy  solution  for 
the  future  industrial  problems  of  France  and  Bel- 
gium. But  before  accepting  this  solution  it  may  be  in 
order  to  inquire  whether  another  may  not  be  found  in 
the  two  smaller  coal  fields  lying  west  of  the  Rhine? 
The  best  available  information  that  we  have  in 
regard  to  the  coal  resources  of  western  Europe  is 
found  in  an  "  Atlas  "  published  by  E.  Gruner, 
Paris,  1903,  and  "The  Coal  Resources  of  the 
World,"  published  at  Toronto  in  1913.  The  latter 
contains  the  reports  of  German  mining  engineers 
on  the  coal  reserves  of  western  Germany  and  as  they 
are  ten  years  later  than  the  French  publication, 
though  in  essential  agreement  with  it,  we  will  avail 
ourselves  of  these  German  reports  in  which  the  fig- 
ures are  given  in  billions  of  metric  tons. 

Actual  Possible 

District  Reserves  Reserves 

Westphalia 56.344  157.222 

West  of  Rhine  * 10.458  Considerable 

Saarbriicken    16.548  Very   considerable 

*  While  the  Saarbriicken  district  lies  west  of  the  Rhine, 
the  *'  West  of  Rhine  district  "  only  includes  the  coal  fields 
lying  north  of  the  Saarbriicken  district. 

11 


THE  ECONOMIC  BASIS 

The  question  of  course  arises: — How  are  we  to 
interpret  the  rather  vague  terms — "  considerable  " 
and  "  very  considerable  "  as  applied  to  the  Possible 
Reserves  of  the  West  of  Rhine  and  Saarbriicken  dis- 
tricts respectively? 

Some  help  may  be  found  in  the  figures  that  are 
given  for  the  Westphalian  district  in  which  the  Pos- 
sible Reserves  are  2.80  times  the  "Actual  Reserves  " 
and  as  the  larger  part  of  the  West  of  Rhine  district 
is  but  an  extension  of  the  Westphalian  basin,  it 
might  be  inferred  that  the  term  "  considerable  "  as 
applied  to  the  former  district  means  that  its  "  Possi- 
ble Reserves  "  are  2.80  times  its  Actual  Reserves, 
or  the  same  as  in  the  Westphalian  district.  From 
this  it  would  follow  that  the  term  "  very  consider- 
able '*  as  applied  to  the  Saarbriicken  district  implies 
a  ratio  greatly  in  excess  of  the  Westphalian  ratio 
of  2.80.  It  is  not  necessary  to  tell  the  reader  that 
this  is  a  rather  unreliable  way  of  determining  the 
"Possible  Reserves"  of  the  West  of  Rhine,  and  Saar- 
briicken districts,  if  any  great  degree  of  exactness 
is  intended,  but  it  does  seem  fair  to  assume  in  a  tenta- 
tive way,  that  the  "  Possible  Reserves  "  of  these 
districts  are  at  least  2.50  times  their  "Actual  Re- 
serves "  as  given  in  our  table.  If  we  perform  this 
multiplication  we  get  the  following  results : — 


OF  AN  ENDURING  PEACE 

For  the  district  West  of  the  Rhine  we  have  an 

Actual  Reserve  of  .  .  .  ., .       10.458 

This  multiplied  by  2.50  gives  us  a  Possible  Re- 
serve of u  . 25.345 

or  a  Total  Reserve  of 35.803 

So  too  for  the  Saarbriicken  district  we  have  an 

Actual  Reserve  of , .  ., 16.548 

This  multiplied  by  2.50  gives  us  a  Possible  Re- 
serve of , ,.  .  .       41.370 

or  a  Total  Reserve  of 57.918 

If  to  the  Total  Reserves  of  the  West  of  Rhine 

district 35.803 

we  add  the  Total  Reserves  for  the  Saarbriicken 

district  .  ., .       57.918 

and  to  this  add  the  Present  Reserves  of  France 

and  Belgium ,.  .  .       28.264 

we  get  a  Total  Reserve  for  these  two  countries  of    121.985 
or  in  brief  122  billion  tons  of  Reserve  coal. 

Whether  this  would  be  sufficient  to  enable 
France  and  Belgium  to  effect  the  great  industrial 
development  on  which  their  survival  depends  must 
be  left  to  the  statesmen  of  these  countries  to  decide 
after  their  engineers  have  carefully  checked  up  the 
figures  of  the  above  tentative  calculation.  If  they 
should  decide  this  question  in  the  affirmative  this 

IS 


THE  ECONOMIC  BASIS 

solution  would  have  whatever  advantage  there  may 
be  in  establishing  a  clearly  defined  and  strategic 
frontier  and  would  carry  us  back  to  the  days  of 
Caesar  when  all  east  of  the  Rhine  was  Germany  and 
all  west  of  that  river  was  Gaul.  If  the  reader  will 
again  turn  to  the  map  of  these  coal  regions  he  will 
notice  that  if  Alsace-Lorraine  is  returned  to  France 
a  very  slight  additional  area,  of  about  10  by  20  miles, 
would  give  her  the  Saarbriicken  coal  basin  with  its 
estimated  coal  reserves  of  nearly  60  billion  tons,  and 
lying  as  it  does  close  to  the  Lorraine  ore  basin,  it 
alone  would  mean  much  for  the  future  industrial 
development  of  France.  If  it  should  be  found  that 
there  is  not  sufficient  coal  west  of  the  Rhine  to  insure 
the  industrial  development  of  France  and  Belgium 
then  there  should  be  no  hesitation  about  expropriat- 
ing the  Westphalian  coal  field,  the  western  end  of 
which  is  but  twenty-five  miles  from  the  Belgian  fron- 
tier. For  France,  cut  off  from  an  adequate  supply 
of  coal,  will  at  best  remain  stationary  in  wealth  and 
population,  while  Germany  with  her  great  reserves 
of  coal  can  agam  double  her  population  in  another 
fifty  years  and  so  prove  irresistible  in  her  determina- 
tion to  conquer  the  hegemony  of  Eru'ope  and  so  of 
the  world. 

It  may  be  said,  that  the  failure  of  Germany  to 
14 


OF  AN  ENDURING  PEACE 

assimilate  the  French  population  of  Alsace  and 
Lorraine  is  a  warning  that  should  not  be  ignored, 
and  hence  for  France  and  Belgium  to  expropriate 
the  territory  west  of  the  Rhine  with  its  distinctly 
German  population  would  only  mean  a  never  ending 
source  of  trouble.  But  is  this  necessarily  true? 
German  methods  as  applied  to  colonies,  or  subject 
people,  are  notoriously  inefficient,  while  France  has 
shown  an  exceptional  degree  of  wisdom  in  adapting 
her  methods  to  the  peculiar  psychology  of  the  con- 
quered people.  Again,  when  it  is  remembered 
that  the  essentially  German  population  of  Alsace  had 
been  so  won  over  by  France  that  forty  years  of  Ger- 
man rule  has  failed  to  win  it  back  to  its  old  German 
allegiance ;  and  when  it  is  further  remembered  that 
the  present  German  population  west  of  the  Rhine 
would  become,  not  the  subjects  of  an  Absolute  Mon- 
arch, but  the  citizens  of  a  great  Industrial  Republic, 
its  successful  assimilation  by  France  would  seem  to 
be  well  within  the  range  of  possible  achievement. 

It  is  true,  that  so  long  as  England  will  permit 
the  free  exportation  of  her  coal,  France  may  make 
progress  in  her  industrial  activities,  but  to  assure 
that  progress  beyond  all  peradventure,  France  must 
have  a  liberal  supply  of  cheap  coal  within  her  own 
frontiers,  and  if  this  adjustment  of  the  coal  supply 

15 


THE  ECONOMIC  BASIS 

of  Europe  is  not  effected  now,  it  must  be  effected 
in  the  near  future,  or  France  will  ere  long  cease  to 
exist  as  one  of  the  great  powers  of  Europe.  As 
Rome  and  Veii  long  fought  for  possession  of  the  salt 
pits  at  the  mouth  of  the  Tiber,  so  Germany  and 
France  are  to-day  battling  for  the  coal  and  iron  pits 
of  western  Europe.  Nor  can  any  adjustment  of 
European  boundaries  long  endure  which  permits 
Germany  to  retain  well  nigh  double  the  amount  of 
coal  that  is  held  by  all  the  rest  of  western  Europe 
taken  together.  Let  us  not  deceive  ourselves.  It 
is  not  common  language,  literature  and  traditions 
alone,  nor  yet  clearly  defined  or  strategic  frontiers, 
that  will  in  the  future  give  stability  to  the  boundary 
lines  of  Europe,  but  rather  such  distribution  of  its 
supplies  of  coal  and  iron  as  will  prevent  any  one  of 
the  great  nations  of  Europe  from  becoming  strong 
enough  to  dominate  or  absorb  all  the  others.  Here 
then  in  giving  to  France  an  adequate  supply  of  coal 
we  have  the  only  possible  way  in  which  the  old 
"  balance  of  power  '*  in  western  Europe  can  be 
re-established.  In  a  word,  the  best  guarantee  for  the 
future  peace  of  Europe  must  be  found  in  a  strong 
England  with  her  187  billion  tons  of  coal;  a  strong 
France  with  approximately  122  bilUon  tons;  a  re- 
constructed Russia  with  233  billion  tons  and  a  chas- 
16 


OF  AN  ENDURING  PEACE 

tened  Germany  with  her  remaining  300  billion  tons 
of  coal  without  including  the  brown  coals  of  Prussia. 

It  may  be  said  that  we  are  here  demanding  im- 
possible conditions;  that  Germany  will  never  sur- 
render any  part  of  her  western  coal  lands,  and 
that  to  make  this  demand  means  to  prolong  the  war 
until  Europe  collapses  in  absolute  exhaustion.  But 
to  pass  intelligently  upon  this  bit  of  camouflage 
we  must  have  clearly  in  mind  what  the  effect  will 
be  upon  European  civilization  if  Germany  is  per- 
mitted to  retain  these  lands. 

As  we  have  elsewhere  written,  France  cut  off 
from  all  hope  of  any  growth  in  wealth  and  popu- 
lation because  of  her  present  limited  supply  of  coal 
must  eventually  succumb  in  the  struggle  for  exist- 
ence, while  Germany  secure  in  the  possession  of 
more  coal  than  all  the  rest  of  western  Europe  taken 
together,  may  in  another  fifty  years,  again  double 
her  population  and  so  prove  irresistible  in  her  deter- 
mination to  conquer  the  hegemony  of  all  Europe. 

Again,  it  must  be  borne  in  mind  that  we  have 
just  as  difficult  a  problem  in  the  adjustment  of  the 
iron  supplies  of  these  two  countries  as  in  the  adjust- 
ment of  their  coal  supplies.  Anticipating  the  argu- 
ment of  later  pages  we  would  here  urge  that  if 
France  is  awarded  the  province  of  Alsace-Lorraine, 

17 


THE  ECONOMIC  BASIS 

stolen  from  her  in  1871,  Germany  will  be  deprived 
of  75  per  cent,  of  all  her  supplies  of  iron,  and  since 
this  would  seriously  halt  her  further  progress  in 
industry,  wealth  and  population  it  does  not  seem 
probable  that  she  will  yield  to  this  demand  any 
more  readily  than  to  a  demand  for  a  part  of  her  west- 
ern coal  lands.  Indeed,  she  could  better  spare  even 
the  Westphalian  coal  field  than  the  iron  ores  of 
Lorraine.  In  a  word,  no  adjustment  of  the  prob- 
lem of  Alsace-Lorraine  is  possible  until  Germany 
is  absolutely  beaten  to  her  knees,  and  when  that  is 
accomplished  there  will  be  little  additional  difficulty 
in  collecting  a  well-earned  indemnity  for  France  in 
terms  of  the  western  coal  lands. 

Let  us  have  no  illusions  about  this  matter,  for 
unless  Germany  is  thus  forced  to  her  knees  so  that 
a  readjustment  of  these  coal  resources  can  be 
brought  about,  she  will  emerge  triumphantly  from 
this  war,  feeling  assured  that  as  the  years  go  by 
her  409  billion  tons  of  coal  will  ultimately  enable  her 
to  conquer  all  Europe. 

The  Allies,  on  the  other  hand,  despite  their 
enormous  sacrifices  of  blood  and  treasure  will  be 
doomed  to  lose  all  for  which  they  have  fought.  It 
may  be  urged  that  this  ultimate  triumph  of  Ger- 
many, even  though  assured,  is  not  an  immediate 
18 


OF  AN  ENDURING  PEACE 

and  pressing  danger,  and  so  in  a  weak  moment 
we  may  be  tempted  to  make  a  peace  that  will  ignore 
this  eventuality.  But  if  we  do,  let  us  not  deceive  our- 
selves with  any  euphemistic  phrases  about  our  having 
won  this  war.  Let  us  at  least  be  frank  with  ourselves 
and  admit  that  in  our  weakness  we  have  allowed 
Germany  to  triumph  over  all  modern  civilization. 

It  is  not  here  maintained  that  there  are  none  but 
economic  causes  of  war.  The  chapter  of  accidents, 
racial  differences,  dynastic  rivalries,  etc.,  still  play 
a  part  ofttimes  forcing  the  peoples  into  wars  in 
which  they  have  no  real  interest.  But  to  hold  that 
with  the  rise  of  democracy  wars  will  cease  is  to  ignore 
the  plain  facts  of  experience,  to  wit,  that  many,  if 
not  most  wars  have  been  due  to  a  divergence  in  eco- 
nomic interest  between  the  peoples  themselves  and 
that  under  such  circumstances  democracy  will  give  as 
fierce  battle  for  what  it  conceives  to  be  its  vital  inter- 
ests as  either  an  oligarchy  or  a  monarchy.  Athens 
indeed  never  gave  such  valiant  battle  under  her  ty- 
rants as  she  did  as  a  free  and  self-governing  people. 

In  concluding  this  part  of  our  paper  we  would 
call  attention  to  the  fact  that  during  the  Civil  War 
in  America  the  people  of  the  seceding  states  held 
that  they  were  fighting  for  the  doctrine  of  "  State's 
Rights ''  while  in  the  same  way  the  great  mass  of 

10 


THE  ECONOMIC  BASIS 

the  people  in  the  North  thought  that  they  were  fight- 
ing for  the  "  Preservation  of  the  Union."  The 
real  leaders  of  the  time,  like  President  Lincoln,  saw 
quite  clearly,  that  these  were  but  rallying  cries, 
and  that  the  real  question  at  issue  was  whether 
a  civilization  based  upon  slavery  or  a  civilization 
based  upon  free  labor  should  survive  in  America. 
So,  too,  in  the  France  of  to-day  the  cry  for  the 
recovery  of  Alsace  and  Lorraine  makes  a  strong 
appeal  to  the  patriotism  of  the  French  people,  and 
so  is  an  effective  rallying  cry  for  the  great  mass  of 
the  people  of  France.  The  leaders  of  France,  how- 
ever, must  realize  that  this  is  not  the  only  important 
question  at  issue.  They  must  see  quite  clearly,  that 
the  survival  of  France  as  one  of  the  great  powers 
of  Europe  depends  upon  her  development  along 
industrial  lines  and  that  this  development  depends 
in  last  resort  upon  her  possession  of  an  adequate 
supply  of  coal  and  iron.  If  they  realize  this  they 
will  be  recreant  indeed  to  their  trust  if  they  agree 
to  any  settlement  of  the  present  difficulty  that  does 
not  give  an  adequate  supply  of  coal  to  France  and 
Belgium  in  lieu  of  an  impossible  indemnity. 

We  have  seen  that  in  earlier  days  the  "  balance 
of  power  "  in  Europe  depended  in  large  part  upon 
the  distribution  of  its  fertile  lands  but  that  with 
20 


OF  AN  ENDURING  PEACE 

the  rise  of  manufactures  this  "  balance  of  power  " 
came  to  depend  as  well  upon  the  distribution  of  the 
fundamental  elements  in  all  industrial  enterprises, 
namely,  Coal  and  Iron.  We  have  seen,  too,  that 
by  the  expropriation  of  the  coal  lands  west  of  the 
Rhine  in  lieu  of  an  impossible  indemnity,  both 
France  and  England  would  have  an  adequate  sup- 
ply of  these  essential  elements  of  progress.  It  now 
remains  for  us  to  inquire  how  these  two  nations  are 
to  provide  the  increased  supply  of  food  that  will  be 
necessary  if  they  are  to  continue  to  grow  in  industry, 
wealth  and  population. 

Fortunately  for  France  the  solution  of  this  prob- 
lem lies  close  at  hand  or  in  her  North  African  posses- 
sions. Indeed,  if  it  had  not  been  for  the  intelligent 
activities  of  General  Lyautey,  the  present  Director- 
General  of  Algeria,  France  might  have  felt  the  sad 
pinch  of  hunger  added  to  her  other  troubles  during 
the  trying  days  of  1916.  Under  this  able  adminis- 
trator, however,  the  deficit  of  2,567,107  tons  in  the 
1915  grain  crop  of  European  France  was  largely 
made  up  by  his  shipment  of  grain  from  Algeria.  In 
keeping  with  this  a  contributor  to  the  December, 
1917,  number  of  Scrihner's  Magazine  reports  that  in 
Paris  he  has  "seen  no  bread  line  anywhere" — and 
that  "bread  is  cheaper  than  in  the  United  States." 

21 


THE  ECONOMIC  BASIS 

This  of  course  raises  the  question:  Can  the 
French  possessions  in  Northern  Africa  be  depended 
upon  to  feed  the  increasing  population  of  France 
which  must  result  from  any  marked  expansion  of 
her  industrial  activities?  We  all  know  in  a  general 
way  that  imder  Carthagenian  as  vmder  Roman  rule 
this  region  was  made  to  yield  generous  crops  of 
grain  by  the  employment  of  the  method  of  **  dry- 
farming,"  and  it  may  be  interesting  to  note  that 
this  method  which  was  introduced  some  years  ago 
on  the  dry  lands  of  western  Kansas  and  Nebraska 
has  there  been  attended  with  such  success  that  our 
experience  is  now  followed  by  all  foreign  countries 
that  are  essaying  to  solve  this  problem.  For  while 
Europe  has  still  much  to  teach  us  about  intensive 
farming  she  now  turns  to  us  for  the  latest  and  best 
information  about  the  extensive  cultivation  of  grain 
lands.  Again,  it  may  fairly  be  urged  that  with  the 
great  stretches  of  Africa  that  are  adapted  to  "  dry- 
farming"  the  problem  of  the  world's  supply  of 
grain  will  long  remain  largely  a  question  of  exten- 
sive cultivation,  especially  since  our  American  ex- 
perience has  shown  that  wheat  may  safely  be  grown 
on  land  with  an  annual  rainfall  as  low  as  six  inches. 

The  only  estimate  that  we  have  been  able  to  se- 
cure, of  the  area  in  Northern  Africa  available  for 
22 


OF  AN  ENDURING  PEACE 

the  growing  of  grain  under  these  conditions,  was 
given  by  Mr.  W.  T.  Swingle,  of  our  own  Agricul- 
tural Department.  As  is  well  known,  he  is  a  highly 
trained,  careful  observer  who  has  spent  much  time 
in  that  part  of  Africa  and  who  gives  it  as  a  very 
conservative  opinion  that  in  the  upper  plateau  of 
Algeria  alone  there  are  tens  of  thousands  of  square 
miles  of  land  that  may  be  utilized  for  the  growing 
of  grain  by  the  intelligent  practice  of  the  method  of 
"  dry-farming."  Again,  in  the  report  of  a  French 
Commission  which  spent  much  time  exploring  the 
supposed  barren  wastes  of  the  Sahara  desert,  we 
learn  that  there  is  an  area  of  9  degrees  of  longitude 
by  12  degrees  of  latitude  with  sufficient  water  to 
grow  grain.  In  a  word,  this  Commission  found 
a  territory  larger  than  European  France,  in 
the  very  heart  of  the  Sahara  desert,  that  may  be 
added  to  the  grain-producing  areas  of  France, 
while  the  great  stretches  of  the  Senegal  and  Niger 
valleys  still  remain  to  be  accounted  for.  Surely 
then  France  has  no  cause  for  anxiety  about  the 
food  supply  for  a  growing  industrial  population. 
For  England,  however,  this  problem  is  an  ever- 
present  source  of  anxiety.  She  cannot  turn  to 
India,  since  even  under  English  supervision  famine 
has  more  than  once  stalked  through  the  land  be- 
ds 


THE  ECONOMIC  BASIS 

cause  of  a  failure  in  the  grain  crops.  It  is  therefore 
to  Africa  with  its  great  cultivable  area  and  limited 
population  that  England  must  turn  for  a  solution 
of  this  problem.  We  all  know  what  an  important 
part  Egypt  played  in  supplying  Rome  with  corn. 
But  while  the  yield  of  the  valley  of  the  Nile  was 
considerable  as  compared  with  the  needs  of  Roman 
civilization  it  would  not  bulk  very  largely  in  satis- 
fying the  world's  present  demand  for  grain,  for 
while  the  soil  of  her  river  bottom  is  very  fertile  the 
area  available  for  cultivation  is  distinctly  limited, 
not  greater,  indeed,  than  the  area  of  Vermont  and 
Rhode  Island  taken  together.  Again,  it  must  be 
remembered  that  cotton,  as  a  more  profitable  crop, 
is  replacing  grain  in  much  of  this  limited  area  and 
this  despite  the  two  crops  per  year  which  are  made 
possible  by  perennial  irrigation. 

It  is  therefore  to  the  upper  Nile  or  to  the  great 
reaches  of  the  Sudan  that  England  must  look  for 
any  important  increase  in  her  supply  of  grain.  Nor 
has  she  been  idle  or  lacking  in  foresight  in  her  plans 
for  the  exploitation  of  this  great  domain  which  has 
an  area  nearly  equal  to  two-thirds  of  India. 
Already,  although  her  title  to  these  lands  extends 
back  but  a  few  decades,  she  has  constructed  a 
railroad  system  reaching  almost  to  the  heart  of  this 
S4 


OF  AN  ENDURING  PEACE 

great  empire  at  El  Obied  and  another  branch  to 
Port  Sudan  on  the  Red  Sea,  so  affording  cheap 
water  transportation  for  the  products  of  this  fertile 
region.  Some  idea  of  the  fertility  of  this  part  of 
the  world  may  be  had  from  "  Egypt  in  Transition  " 
by  Sidney  Low,  in  which  he  writes :  "  The  northern 
part  seems  bare  and  brown,  but  with  water  it  would 
bloom  as  the  rose.  It  is  nowhere  quite  rainless  so 
that  much  of  it  may  be  redeemed  by  *  dry-farm- 
ing '  and  more  by  irrigation  while  in  the  south  or 
tropical  portion  rain  is  abundant."  Again,  Sir 
William  Garston,  a  well-informed  investigator,  tells 
us  that  it  is  one  of  the  finest  wheat-producing  coun- 
tries in  the  world,  while  Sir  Lawrence  Balls  in  his 
"  Egypt  and  the  Egyptians  '*  writes  that  "  The 
Sudan  has  enormous  areas  suitable  for  maize 
cultivation.'* 

The  most  authoritative  as  well  as  the  most  satis- 
factory source  of  information  on  this  subject  is  a 
report  on  "  The  Improvement  and  Possible  Devel- 
opment of  the  Sudan  "  by  W.  W.  A.  Fitzgerald, 
published  at  Cairo  in  1903,  from  which  we  will  now 
quote  freely  without  further  reference  to  the  source 
of  our  information.  ..."  That  in  the  region  of  low 
rainfall  we  may  anticipate  with  confidence  that 
what  irrigation  has  accomplished  in  India,  South 

26 


THE  ECONOMIC  BASIS 

Africa,  and  especially  in  the  arid  western  states  of 
North  America  can  also  be  accomplished  in  the 
Sudan."  Again,  "  The  fact  is  apt  to  be  overlooked 
that  behind  the  sandy  wastes  that  hem  in  the  north- 
ern frontiers  there  extend  extensive  fertile  regions 
— which  in  the  provinces  of  Khartomn  and  Senar 
alone  are  estimated  at  many  million  acres."  .  .  • 
Such  parts  of  this  region  as  depend  upon  a  system 
of  irrigation  are  handicapped  by  the  fact  that  the 
Lower  Nile  valley  has  prior  rights  to  the  waters  of 
that  river,  but  already  English  engineers  are  at 
work  upon  the  problem  of  damming  the  waters  of 
Lake  Victoria  and  when  this  is  accomplished  and 
labor  is  secured  from  Africa  or  from  the  teeming 
millions  of  India,  this  region  is  assured  of  a  won- 
derful development  not  alone  in  grain-growing,  but 
as  well  in  the  growing  of  cotton,  sugar,  rubber,  etc. 
Nor  is  the  climate  impossible  for  Europeans 
over  any  large  area.  **  Even  in  the  Sudd  or  Swamp 
region,  where  rains  are  frequent  for  five  months  of 
the  year,  there  is  much  sunshine  and  the  average 
temperature  is  only  85°  F.  .  .  .  In  the  Subat 
valley  where  rains  prevail  from  May  to  October 
there  are  neither  fogs  nor  mists  and  from  May  to 
November  the  climate  is  in  no  sense  relaxing.  .  .  . 
In  Bogosland  rains  are  intermittent  from  April 
26 


OF  AN  ENDURING  PEACE 

to  October,  but  after  July  the  thermometer  rarely 
exceeds  77°.  .  .  .  In  the  higher  and  drier  regions, 
as  at  El  Obied  and  even  below  this  point,  the  tem- 
perature ranges  from  77°  to  91°,  although  there  is  a 
record  of  105°,  while  at  Khartoum  the  summer  is 
said  to  be  cooler  than  at  Cairo."  In  the  regions  of 
high  rainfall  you  are  of  course  confronted  by  the 
problem  of  tropical  diseases,  but  after  the  experi- 
ence of  Dr.  Gorgas  at  Panama  this  need  not  cause 
any  great  uneasiness.  In  a  word,  England  is  here 
in  possession  of  a  domain  imperial  in  its  extent  and 
possibihties  in  most  of  which  Europeans  can  live  in 
reasonable  comfort  and  health. 

But  what  shall  it  profit  either  France  or  Eng- 
land to  possess  great  stretches  of  corn  land  in 
Africa  if  in  time  of  war  they  can  be  cut  off  from 
this  source  of  their  food  supply  by  the  enemies' 
navy?  In  reply  to  this  it  seems  quite  fair  to  assume 
that  before  these  countries  again  enter  into  a  great 
European  conflict  they  will  have  completed  a  tun- 
nel from  Dover  to  Calais  so  that  the  transportation 
of  men  and  supplies  between  these  two  points  shall 
never  again  be  in  danger  of  interruption.  Again, 
if  they  can  succeed  in  establishing  the  necessary 
friendly  relations  with  Spain,  the  construction  of 
another  tunnel  at  Gibraltar  would  forever  protect 

27 


THE  ECONOMIC  BASIS 

their  supply  of  food,  since  a  slight  rail  extension 
would  connect  them  with  the  present  French  rail- 
road system,  which  to-day  carries  you  to  the  very 
heart  of  all  this  region  at  Timbuctoo  as  well  as  to 
the  southeastern  coast  of  Tunisia.  From  the  former 
the  line  could  readily  be  extended  into  the  fertile 
stretches  of  the  Sudan  and  thence  up  the  Nile 
valley  and  on  to  Cape  Colony,  while  from  the  lat- 
ter an  extension  might  be  made  across  Tripoli  to 
Cairo  and  the  lower  Nile  valley  with  the  possibility 
of  extending  this  line  to  India  at  some  future  day. 
In  any  event,  the  construction  of  the  tunnels  at 
Dover  and  Gibraltar  would  protect  the  food  supply 
of  England  and  France  in  all  the  years  to  come. 
Nor  is  there  any  reason  to  anticipate  any  greater 
engineering  difficulties  in  the  construction  of  the 
tunnel  at  Gibraltar  than  in  the  construction  of  the 
much  longer  tunnel  at  Dover-Calais. 

It  may  be  urged  that  we  have  here  been  losing 
sight  of  the  fact  that  this  is  a  land  of  magnificent 
distances.  The  answer  to  this,  however,  is  that 
France  and  England  have  divided  well  nigh  a  con- 
tinent between  them,  and  if  they  are  to  administer 
these  great  regions  with  sanity  and  wisdom  they 
will  be  forced  to  think  in  continental  terms  and  not 
in  the  terms  of  a  county  or  a  department.  Nor  is 
28 


OF  AN  ENDURING  PEACE 

there  any  reason  to  doubt  that  they  will  think  in 
the  larger  terms.  To  this  it  may  be  added  that  not 
the  least  of  the  advantages  that  would  accrue  from 
the  establishing  of  this  overland  route  would  be  its 
influence  in  sealing  for  all  time  the  friendship  be- 
tween England  and  France,  a  friendship  already 
strongly  cemented  in  blood  and  treasure. 

The  building  of  these  tunnels,  interesting  and 
important  as  they  might  prove  to  be  at  some  future 
day,  does  not  serve  us  in  any  good  stead  at  the  pres- 
ent time.  And  so  we  would  suggest  that  if  this 
war  is  to  be  still  further  prolonged  it  might  be 
well  to  ship  immediately  tractors,  ploughs,  har- 
rows, etc.,  from  this  country  to  northern  Africa 
and  so  find  employment  for  the  thousands  of 
German  prisoners  in  France  and  England  in  the 
cultivation  of  the  great  areas  in  Northern  Africa 
that  are  known  to  be  suited  to  "  dry-farming.'' 
It  might  even  be  well  to  send  men  from  our  Agri- 
cultural Department  who  are  familiar  with  the 
experience  in  the  arid  belt  of  our  western  states, 
to  co-operate  with  General  Lyautey  in  the  promo- 
tion of  this  enterprise.  This  would  have  the  double 
advantage  of  providing  the  much-needed  grain 
without  further  taxing  our  resources  and  would  re- 
duce the  amount  of  tonnage  necessary  for  its  trans- 

29 


THE  ECONOMIC  BASIS 

portation,  since  the  distance  even  from  Oran  to 
Marseilles  is  very  much  shorter  than  from  New 
York  to  Liverpool. 

Let  us  now  inquire  what  bearing  all  this  has 
upon  the  terms  of  peace  that  can  be  conceded  to 
Germany  at  the  close  of  the  present  war.  Presi- 
dent Wilson  in  his  last  address  to  Congress  has 
laid  down  a  platform  upon  which  every  right  think- 
ing American  should  stand,  to  wit:  that  "our 
present  and  immediate  task  is  to  win  the  war,"  .  .  . 
that  "  the  Germans  must  repair  the  wrongs  their 
rulers  have  done  "...  and  that  **  we  are  seeking  a 
permanent  peace,  based  upon  generosity  and  jus- 
tice to  the  exclusion  of  all  selfish  claims  even  on  the 
part  of  the  victors."  It  is  in  the  broad  spirit  of  this 
statesmanlike  document  that  we  must  now  interpret 
the  results  of  our  economic  studies. 

If  the  German  people  persist  in  defending  the 
barbarous  practices  and  crude  political  philosophy 
which  has  made  their  name  anathema  throughout 
the  civilized  world  but  little  can  be  conceded  in  the 
way  of  generous  treatment.  Civilization  dare  not 
put  into  the  hands  of  such  a  people  the  weapons 
of  its  own  destruction,  but  if  with  a  chastened  spirit 
the  German  people  repudiate  the  evil  ways  of  their 
present  rulers,  the  question  must  needs  arise — what 
80 


OF  AN  ENDURING  PEACE 

in  concrete  terms  can  then  be  conceded  to  them  not 
in  the  interest  of  Germany  alone  but  in  the  interest 
of  that  modern  civilization  whose  very  existence 
they  have  threatened  and  whose  preservation  and 
progress  should  be  the  aim  of  all  our  political 
philosophy? 

We  have  seen  that  under  the  assumption  of  an 
all-rail  route  to  the  grain  lands  of  Africa ;  the  return 
of  Alsace-Lorraine;  and  the  expropriation  of  the 
coal  lands  west  of  the  Rhine,  France  and  England 
would  have  an  assured  and  adequate  supply  of  the 
three  essentials  of  material  progress,  to  wit:  coal, 
iron  and  food.  Clearly  then  if  Germany  is  to  sur- 
vive and  make  a  like  progress  in  industrialism  and 
civilization,  some  consideration  must  be  given  to 
the  problem  of  conceding  to  her  a  like  adequate 
supply  of  these  essential  commodities.  The  prob- 
lem is  by  no  means  a  simple  one,  and  yet  on  the  wise 
solution  of  this  problem  must  depend  that  "  balance 
of  power  "  on  which  in  final  resort  the  lasting  peace 
of  the  world  depends. 

The  solution  of  the  coal  problem  in  Germany 
presents  no  very  great  difficulties  since  even  if 
France  and  Belgium  should  expropriate  the  entire 
Westphalian  coal  field  Germany  would  still  retain 
169  billion  tons  without  including  the  brown  coals 

81 


THE  ECONOMIC  BASIS 

of  Prussia.  It  is  true  that  these  brown  coals  are 
of  an  inferior  quality  as  compared  with  the  bitu- 
minous coal  of  Westphalia,  but  this  is  not  necessarily 
an  insurmountable  difficulty  since  the  drift  of  mod- 
ern practice  is  toward  the  use  of  gas  rather  than  the 
burning  of  the  coal  directly,  even  in  metallurgical 
processes.  The  iron  problem,  however,  presents 
some  serious  difficulties.  It  appears  that  in  1871, 
before  the  signing  of  the  treaty  of  Versailles,  Ger- 
many had  the  iron  lands  of  Lorraine,  containing  one 
of  the  largest  and  most  important  deposits  of  iron  in 
the  world,  very  carefully  examined  and  reserved  to 
herself  what  her  experts  regarded  as  the  valuable 
part  of  this  ore  land.  The  balance  was  left  to  France 
because  it  ran  too  high  in  phosphorus  and  because 
they  thought  that  the  limestone  in  which  the  ore  was 
found  would  be  so  flooded  with  water  as  to  render 
mining  operations  impossible.  As  a  matter  of  fact 
the  water  has  not  proved  to  be  a  very  formidable 
difficulty,  while  the  invention  by  two  British  citi- 
zens, Gilchrist  and  Thomas,  of  a  process  for  elimi- 
nating the  phosphorus  and  its  utilization  in  phos- 
phates for  manuring  purposes  has  changed  the 
whole  aspect  of  the  problem,  and  incidentally  has 
put  the  much  vaunted  efficiency  of  German  tech- 
nology in  a  rather  awkward  position.  Thanks  to 
82 


OF  AN  ENDURING  PEACE 

their  lack  of  efficiency,  in  this  as  in  so  many  other 
technical  matters,  they  left  to  France  by  far  the 
largest  body  of  this  ore  while  to-day  they  are  sacri- 
ficing hundreds  of  thousands  of  lives  and  billions 
of  marks  in  a  vain  effort  to  correct  this  mistake. 

One  of  the  results  of  this  error  on  the  part  of 
the  German  experts  is  the  fact  that  the  line  of  the 
frontier  between  France  and  Germany  as  deter- 
mined in  1871,  runs  directly  through  this  great 
body  of  ore  from  which  it  follows  that  there  must 
be  some  change  in  the  location  of  this  line  if  peace 
is  to  be  preserved  for  any  long  time.  France,  of 
course,  will  hold  fast  to  her  contention  that  she 
must  get  back  Alsace-Lorraine  of  which  she  was 
robbed  in  1871,  while  Germany,  knowing  full  well 
that  her  very  existence  both  in  peace  and  war  de- 
pends upon  her  at  least  retaining  what  she  now 
has  of  these  iron  lands,  will  long  insist  on  not  part- 
ing with  Lorraine,  and  this  not  because  of  its  fertile 
lands  but  because  of  its  great  deposit  of  iron-ore. 
Note,  too,  that  if  France  secures  Alsace-Lorraine 
without  securing  any  part  of  the  western  coal  lands, 
a  very  interesting  situation  will  arise  in  which 
France  will  be  in  control  of  all  the  iron  and  Germany 
in  practical  control  of  all  the  coal  of  northern 
Europe,  at  least  so  far  as  the  continent  is  concerned 
(Plate  II). 

33 


THE  ECONOMIC  BASIS 

In  September,  1915,  an  article  appeared 
in  "  La  Revue  de  Deux  Mondes  "  in  which  the 
writer  suggested  a  very  simple  solution  for  this 
difficulty,  to  wit,  that  France  should  exchange  the 
ores  of  Lorraine  for  the  coals  of  Westphalia  as 
commercial  products.  To  this  it  may  be  answered 
that  while  this  arrangement  seems  to  be  charming 
in  its  simplicity  it  would  hardly  be  accepted  by 
Germany,  since  in  the  event  of  another  war  she 
would  be  hopelessly  at  the  mercy  of  France  for 
her  supply  of  guns  and  munitions. 

It  has  also  been  suggested  that  a  buffer-state 
be  created,  under  an  "  international  guarantee,"  to 
include  both  the  iron  mines  of  Lorraine  and  the 
coal  mines  of  Westphalia.  But  when  we  remember 
how  ruthlessly  Germany  over-rode  her  solemn 
treaty  obligation  in  her  invasion  of  Belgium,  it 
hardly  seems  probable  that  France  would  be  a  party 
to  such  an  arrangement.  And  so  whether  the  fron- 
tier line  continues  to  pass  through  the  middle  of  this 
great  ore  deposit ;  whether  it  is  shifted  eastward  by 
the  giving  back  of  Alsace-Lorraine  to  France,  or 
whether  we  seek  to  create  a  buffer  state  under  an 
**  international  guarantee "  we  are  confronted  in 
each  and  every  case  by  serious  difficulties. 

Emboldened  by  this,  we  will  presume  to  suggest 
S4 


OF  AN  ENDURING  PEACE 

a  quite  different  solution  for  this  problem.  In 
passing  judgment  upon  this  suggestion  it  must  be 
borne  in  mind  that  it  is  made  under  the  assumption 
that  the  military  power  of  Germany  has  been 
crushed  and  that  Germany,  repenting  her  evil  ways, 
has  at  last  qualified  for  admission  to  the  "  partner- 
ship of  nations."  For  unless  we  clearly  distin- 
guish between  the  terms  that  can  be  granted  to  an 
unregenerate  Germany  and  those  that  can  be 
granted  to  her  as  a  chastened  people  anxious  to 
again  take  its  place  among  the  civilized  nations  of 
the  world,  nothing  but  confusion  can  arise.  In 
brief,  then,  a  repentant  Germany  must  be  accorded 
such  a  supply  of  coal,  iron  and  food  as  will  make 
possible  her  further  progress  in  industry,  wealth 
and  population  or  we  shall  give  rise  to  such  a  fes- 
tering sore  in  the  body  politic  of  our  modern  civiliza- 
tion as  will  ere  long  again  shake  it  to  its  very  base. 
In  brief,  if  Alsace-Lorraine  is  returned  to 
France,  as  it  should  be,  it  would  strip  Germany 
of  seventy-five  per  cent,  of  her  present  supply  of 
iron  ore,  and  if  this  is  done  some  provision  must 
be  made  to  replenish  Gei^any's  hopelessly  de- 
pleted supply  of  these  ores  if  she  again  qualifies  for 
admission  to  the  "  partnership  of  nations."  If,  how- 
ever, Germany  continues  imrepentant  then  the  most 

35 


THE  ECONOMIC  BASIS 

effective  way  of  rendering  her  impotent  as  a  great 
power  is  to  cut  her  off  from  these  supplies  of  iron, 
but  in  doing  this  let  us  not  fail  to  remember  that  we 
are  undertaking  the  very  serious  task  of  holding 
seventy  million  people  hopelessly  in  leash.  It  may 
be  that  we  will  be  forced  to  accept  this  undesirable 
consimimation,  but  let  us  not  do  so  in  any  light  or 
flippant  manner  but  rather  as  serious-minded  men 
forced  to  face  a  grave  and  unavoidable  dilemma. 

It  is  only  when  we  realize  that  without  the  iron 
ores  of  Lorraine  Germany  would  lie  like  some  huge 
helpless  hulk,  the  prey  of  every  storm  that  breaks 
over  the  sea  of  European  politics ;  doomed  to  sink  at 
last  and  disappear  as  a  great  power  from  the  map  of 
Europe,  that  we  can  understand  the  frankness  of 
Maximilian  Harden's  remark:  "  If  the  French  peo- 
ple think  that  the  re-establishment  of  peace  is  only 
possible  through  the  restitution  of  Alsace-Lorraine 
and  if  necessity  compels  us  to  sign  such  a  peace, 
seventy  million  Germans  will  tear  it  up."  Let  us 
not  dismiss  this  too  lightly  as  another  example  of 
Germany's  willingness  to  regard  the  most  solemn 
treaty  obligations  as  mere  "  scraps-of -paper."  For 
in  the  ore-mines  of  Lorraine,  vital  alike  to  the  sur- 
vival of  France  as  to  the  survival  of  Germany,  we 
have  the  rock  on  which  all  attempts  to  formulate  the 
86 


OF  AN  ENDURING  PEACE 

terms  of  peace  are  in  serious  danger  of  foundering. 
Well  then  has  M.  Pichon,  former  French  Minister 
of  Foreign  Affairs,  declared:  "  This  is  a  war  to  the 
death." 

Is  there  then  no  escape  from  the  toils  in  which 
our  modern  civilization  seems  to  be  enmeshed?  In 
suggesting  a  solution  for  this  very  serious  difficulty 
we  must  ask  the  reader  to  forget  for  the  nonce  all 
that  he  has  read  about  the  Pan- German  Plot  as  the 
sole  and  only  cause  of  the  present  war,  although  later 
on  we  will  return  to  the  consideration  of  the  serious 
problems  raised  by  the  Bagdad  Railway.  We  here 
only  ask  the  reader  to  realize  that  there  may  be  other 
difficulties  involved  in  the  settlement  of  this  war 
and  that  he  will  for  the  present  fix  his  mind  upon 
the  very  pressing  difficulty: — ^what  shall  be  done 
with  the  ore  mines  of  Lorraine? 

We  all  know  that  in  classical  literature  there 
are  frequent  references  to  the  mines  of  gold,  silver, 
lead,  copper  and  iron  in  Asia  Minor  and  our  sug- 
gestion is  that  we  might  there  find  a  solution  for 
our  difficulty.  The  only  reliable  source  of  infor- 
mation that  we  have  to-day  in  regard  to  the  possi- 
bilities of  iron  production  in  Turkey  is  to  be  found 
in  the  report  to  the  "Congress  of  the  World's  Geol- 
ogists "  held  at  Stockholm  in  1909.     M.  Ettore 

87 


THE  ECONOMIC  BASIS 

Coulant,  Ingenieur  en  Chef  des  Mines,  Constanti- 
nople, informs  us  that  while  the  amount  mined  to- 
day is  insignificant  he  is  satisfied  that  with  a  more 
liberal  regime  there  will  be  such  a  development  in 
the  near  future  as  will  give  Turkey  an  important 
place  among  the  iron-producing  countries  of  the 
world.  He  also  gives  a  list  of  localities  where  there 
are  considerable  showings  of  iron,  some  of  them  but 
a  few  miles  from  the  Black  Sea.  Among  others 
he  mentions  those  in  the  neighborhood  of  Trebi- 
zonde,  which  he  says  were  exploited  in  ancient  times. 
It  is  quite  possible  that  these  are  the  mines  referred 
to  in  Xenophon's  account  of  the  march  of  the  ten 
thousand  for,  soon  after  they  left  this  town,  where 
they  had  their  first  glimpse  of  the  sea,  they  reached 
the  land  of  the  Chalybes.  "  These,'*  he  writes, 
"  are  a  people  few  in  number,  and  subject  to  the 
Mossynoecians.  Their  livelihood  was  for  the  most 
part  derived  from  mining  and  forgi7ig  iron/'  (Book 
V. )  Again,  that  this  was  one  of  the  early  sources  of 
iron  for  Rome  is  at  least  suggested  by  the  fact  that 
the  Latin  word  for  steel  was  chalybs  which  still 
survives  in  our  word  chalybeate.  There  are  also 
important  showings  of  iron  ore  in  the  neighborhood 
of  Adrianople  and  at  several  points  not  far  from 
the  Sea  of  Marmora  in  European  Turkey.  So,  too, 
38 


OF  AN  ENDURING  PEACE 

in  Albania,  which  may  serve  to  explain  Italy's  wise 
and  keen  interest  in  that  part  of  the  Adriatic  coast. 
For,  if  she  could  add  to  this  some  part  of  the  coal 
lands  of  Austria  her  industrial  outlook  would  be 
greatly  improved. 

In  this  same  volume  there  is  a  report  by  a  Ger- 
man engineer,  Max  Nottmeyer,  Bergwerkdirektor, 
which  gives  us  a  much  more  detailed  account  of  the 
iron  resources  of  Turkey,  supplemented  as  it  is  by 
frequent  analyses  of  the  ores.  Again,  avoiding  the 
technical  details,  we  can  quote  this  writer  as  holding 
that  Turkey  is  very  rich  in  iron,  ores  with  60  per 
cent,  of  metallic  iron  being  of  frequent  occurrence. 
One  of  the  most  interesting  features  of  this  report 
is  the  account  of  the  ores  in  the  neighborhood  of 
Damascus,  which  he  says  are  liberal  in  amount  and 
excellent  in  quality,  so  recalling  the  traditional  excel- 
lence of  the  old  Damascus  blades.  Again,  he  calls 
attention  to  the  fact  that  there  are  important  show- 
ings of  coal  in  this  neighborhood  as  also  at  Mt. 
Hermon,  where  he  says  there  are  distinct  outcrop- 
pings  of  lignite  coals.  Oil,  too,  is  found  in  the 
valley  of  the  Tigris,  from  Mosul  to  its  mouth,  while 
in  the  immediate  neighborhood  of  the  Persian  Gulf 
there  is  an  oil  field  of  great  promise.  Now  if  these 
showings  of  iron,  coal  and  oil  should  justify  them- 

39 


THE  ECONOMIC  BASIS 

selves  they  might  well  play  a  somewhat  important 
part  in  the  rehabilitation  of  Palestine  as  the  centre 
of  Zionism. 

Of  course  even  where  the  iron  mines  are  close 
to  the  Black  Sea,  so  giving  possible  water  transpor- 
tation via  the  Danube  and  an  Austro- German  canal 
system  to  the  coal  regions  of  Silesia,  the  freight 
charges  would  be  greatly  in  excess  of  those  incurred 
in  the  Lorraine- Westphalian  region.  When,  how- 
ever, we  remember  that  the  Bethlehem  plant  in 
Pennsylvania  brings  its  ores  from  as  far  afield  as 
Cuba  and  Chile,  this  difficulty  does  not  seem  to  be 
an  insurmoimtable  one,  especially  when  it  is  remem- 
bered that  many  of  the  ores  in  Asia  Minor  are 
magnetites  with  over  70  per  cent,  of  metallic  iron 
while  the  ores  from  Lorraine  seldom  reach  40  per 
cent.  Again,  the  shaft  mining  in  Lorraine  and  the 
necessity  of  lifting  two  tons  of  water  for  every  ton 
of  ore  extracted  would  offset  much  of  the  trans- 
portation charges  on  ore  from  Asia  Minor. 

That  there  are  other  difficulties  to  be  confronted 
by  this  proposal  need  hardly  be  urged  at  this  time 
in  any  detailed  way.  We  should  not,  however,  lose 
sight  of  the  fact  that,  before  finally  passing  upon 
this  proposal  there  must  be  a  careful  survey  of  this 
region  by  competent  mining  geologists,  the  neces- 
40 


OF  AN  ENDURING  PEACE 

sary  drillings  being  made  wherever  the  showings 
will  justify  this  action.  Again,  while  the  ores  might 
find  cheap  water  transportation,  Germany  would 
naturally  want  to  be  assured  of  an  all-rail  route  to 
her  new  and  important  interests  in  Asia-Minor.  As 
this  might  involve  a  tunnel  under  the  Bosphorus  we 
find  ourselves  in  another  impasse  because  of  Russia's 
long  standing  and  perfectly  natural  claim  for  a  free 
outlet  for  her  ships  to  the  waters  of  the  world.  This 
might  call  for,  what  has  often  been  suggested,  the 
creation  of  a  federated  Balkan  state  under  an  "  in- 
ternational guarantee  "  while  Germany  might  be 
granted  a  right  of  way  for  a  railroad  under  the  same 
guarantee;  this,  of  course,  being  conditioned  upon 
Germany's  continuing  to  "  bring  forth  fruits  meet 
for  repentance." 

It  is  not  the  purpose  of  the  present  paper  to 
attempt  to  find  a  solution  for  all  the  difficulties  that 
may  arise  in  the  practical  working  out  of  this  sug- 
gestion, nor  even  to  insist  too  strongly  upon  this 
particular  solution  of  the  very  difficult  problem  of 
finding  an  available  supply  of  iron  for  Germany 
imder  the  assumption  that  in  fixing  the  terms  of 
peace  Alsace-Lorraine  will  surely  be  returned  to 
France.  But  we  do  wish  to  insist  as  strongly  as 
possible  that  some  solution  must  be  found  for  this 

41 


THE  ECONOMIC  BASIS 

problem  if  we  do  not  wish  to  create  an  Ireland  of 
seventy  million  instead  of  four  million  people  in 
the  very  heart  of  Europe.  Again,  it  may  fairly  be 
m-ged  that  the  solution  here  suggested  has  one  great 
advantage  over  all  others,  so  far  proposed,  in  that  it 
solves  at  one  and  the  same  time  an  equally  important 
and  pressing  problem,  namely,  the  providing  of  an 
adequate  supply  of  food  for  the  increasing  indus- 
trial population  of  Germany  by  opening  up  Turkey 
in  Asia  to  modern  agricultural  methods. 

Oscar  L.  Heizer,  our  Vice  Consul  General  at 
Constantinople,  writes  in  a  consular  report,  January 
9th,  1913,  that  "  the  average  farm  in  much  of  this 
country  contains  but  ten  acres  while  many  farms 
contain  less  than  three  acres.  .  .  .  On  these  small 
farms  only  primitive  methods  are  used,  the  plough- 
ing being  done  by  placing  an  iron  point  on  a  sharp- 
ened stick.  .  .  .  The  planting  and  reaping  are 
done  by  hand,  and  the  grain  is  thrashed  in  the  same 
manner  by  placing  the  grain  upon  the  ground  and 
drawing  a  heavy  plank  of  wood  over  it,  after  which 
the  grain  is  separated  from  the  chaff  by  hand." 
Clearly  there  is  here  much  room  for  improvement. 

Shortly  before  the  present  war  broke  out  various 
schemes  for  irrigating  large  sections  of  this  land 
were  suggested.  One  by  a  French  Company,  I 
42 


OF  AN  ENDURING  PEACE 

think,  for  the  recovery  of  the  fertile  lands  in  Cilicia. 
Another  by  the  Bagdad  Railway  for  the  redemption 
of  some  125,000  acres  contiguous  to  its  lines,  and 
the  still  more  ambitious  scheme  of  Sir  Wm.  Will- 
cocks  to  recover  the  great  stretches  of  fertile  land 
in  the  valleys  of  the  Euphrates  and  the  Tigris. 
Others  again  have  urged  that  much  of  the  land  on 
the  upper  plateau  was  suitable  for  "  dry-farming." 
Here  then  we  find  great  areas  of  wheat  lands  that 
could  be  redeemed  under  German  administration, 
and  the  introduction  of  modern  methods,  and  so 
made  to  yield  an  abundance  of  grain  for  her  increas- 
ing industrial  population  if  she  is  to  be  permitted 
to  grow  in  wealth  and  population. 

M.  Cheradame,  who  has  done  such  excellent 
work  in  persistently  calling  attention  to  the  evils 
that  might  result  from  the  completion  of  the  Bagdad 
Railway,  and  hence  the  necessity  for  destroying  the 
Prussian  Military  System  by  the  signal  defeat  of 
their  armies,  is  likely  to  take  serious  exception  to  the 
solution  suggested  in  the  preceding  pages  if  he 
should  ever  chance  to  read  them.  Nevertheless,  I 
take  it  that  the  points  of  difference  between  us  are 
not  so  serious  as  our  points  of  agreement.  We  both 
hold  that  there  can  be  no  lasting  peace  without  the 
absolute  destruction  of  the  military  power  of  Ger- 

43 


THE  ECONOMIC  BASIS 

many.  Nay,  more,  that  this  must  be  a  fact  precedent 
to  all  discussion  of  the  terms  of  peace ;  that  it  is  idle 
and  mischievous,  if  not  treasonable,  to  talk  of  peace 
save  under  the  assumption  that  this  military  success 
has  been  achieved  since  all  such  talk  but  strengthens 
their  resolve  to  continue  the  war  and  so  gives  aid  and 
comfort  to  the  enemy. 

Where  then  is  the  source  of  our  disagreement? 
Quite  early  in  the  present  paper  we  called  attention 
to  the  fact  that  in  any  attempt  to  fix  the  terms  of 
peace  we  must  clearly  distinguish  between  the  terms 
that  can  be  granted  to  an  unrepentant  Germany  and 
those  that  should  be  granted  to  her  when  she  has 
again  qualified  for  admission  to  the  **  partnership 
of  nations."  Now  it  seems  to  the  present  writer 
that  M.  Cheradame  is  too  prone  to  lose  sight  of  the 
second  of  these  conditions.  This  is  seen  in  an  article 
in  the  "Atlantic  Monthly,"  December,  1917,  in 
which  he  writes  **  As  a  matter  of  fact  the  Germans 
have,  for  all  time,  had  such  a  penchant  for  rapine 
.  .  .  ever  since  the  dawn  of  history  they  have 
always  subordinated  everything  to  their  passion  for 
lucrative  wars.  The  same  is  true  of  them  to-day." 
In  a  word,  M.  Cheradame  would  seem  to  regard  the 
Germans  as  beyond  all  hope  of  any  moral  regenera- 
tion and  if  you  start  with  this  as  your  premise  it  is 
44 


OF  AN  ENDURING  PEACE 

difficult  to  see  how  you  are  to  avoid  the  conclusion 
that  they  should  be  utterly  destroyed,  so  that  they 
may  never  again  seriously  disturb  the  peace  of  the 
world.  But  may  we  not  gravely  question  the  sound- 
ness of  this  premise?  Was  not  President  Wilson 
in  his  Buffalo  address  much  nearer  the  truth  when 
he  said:  "I  believe  that  the  spirit  of  freedom 
can  get  into  the  hearts  of  Germans  and  find  as  fine 
a  welcome  there  as  it  can  find  in  any  other  hearts.'* 

It  may  be  asked  how  we  can  reconcile  this  with 
the  many  horrible  outrages  committed  by  German 
soldiers  and  Germany's  despicable  plottings  against 
a  government  with  which  she  was  openly  maintain- 
ing friendly  relations.  So,  too,  their  violation  of 
the  most  sacred  treaty  obligations  and  their  cynical 
disregard  of  all  moral  restraints  "  must  give  us 
pause."  Answer  might  be  made  to  this  that  Ger- 
many is  to-day  suffering  from  a  futile  attempt  to 
confine  the  new  wine  of  the  modern  industrial  psy- 
chology of  a  great  mass  of  her  people  in  the  old 
bottles  of  the  system  of  government  developed  in  the 
days  of  a  feudal  agriculturalism. 

To  make  this  quite  clear  it  will  be  necessary  to 
turn  back  the  pages  of  history  to  the  time  immedi- 
ately following  the  Crusades  when  towns  and  cities 
suddenly  sprang  up  or  grew  apace  while  with  their 

45 


THE  ECONOMIC  BASIS 

rise  came  that  wondrous  growth  in  civil  liberty  which 
belies  all  the  illusions  of  our  childhood  about  liberty 
being  born  of  the  free  spaces  of  the  country.  The 
exactions  of  the  feudal  lords  so  easy  of  enforcement 
in  the  outlying  country  districts  were  now  con- 
fronted by  the  charters  of  these  towns  and  cities 
while  within  their  walls  there  had  grown  up  those 
trade  guilds  that  proved  to  be  such  powerful  de- 
fenders of  the  weak  against  oppression.  We  are 
prone  to  think  of  these  guilds  as  strictly  trade  organ- 
izations or  as  organizations  of  men  all  of  whom  were 
interested  in  the  sale  or  production  of  the  same 
commodities.  In  a  large  measure  this  was  undoubt- 
edly true  and  yet  at  times  they  seem  to  have  per- 
formed a  broader  function  in  affording  protection 
to  men  in  no  way  connected  with  the  particular 
activities  indicated  by  the  name  of  the  Guild. 

This  comes  out  quite  clearly  in  Vasari's  "  Lives 
of  the  Painters,"  where  we  find  that  many  artists 
on  first  reaching  Florence  were  initiated  into  the 
"  Grocers'  Guild  "  while  later  on,  when  they  had 
acquired  some  reputation  as  artists  they  were  initi- 
ated into  the  "  Gold  Workers'  or  Artists'  Guild." 
It  would  therefore  seem  fair  to  assume  that  for  some 
time  after  the  rise  of  the  towns  the  feudal  lord  pre- 
simied  to  follow,  within  the  city's  walls,  any  one  on 
46 


OF  AN  ENDURING  PEACE 

whom  he  wished  to  enforce  some  feudal  claim  and 
that  in  the  Florence  of  that  day  men  were  forced 
to  seek  the  protection  of  some  corporate  body  and 
that  the  "  Grocers'  Guild"  was  generally  utilized  for 
that  purpose  since  it  was  probably  easier  to  gain 
admission  to  the  "  Grocers "  than  to  any  other 
"  Guild." 

Now  the  influx  of  men  from  the  country,  and 
their  employment  in  commerce  and  industry,  in- 
stead of  in  agriculture,  necessarily  led  to  a  marked 
change  in  the  psychology  of  these  men.  So  long 
as  the  great  bulk  of  mankind  were  engaged  in  agri- 
culture, tilling  the  land  whose  title  was  vested  in 
some  feudal  lord,  the  position  of  the  masses  was 
neither  a  very  enviable  one  nor  one  likely  to  beget 
in  them  any  strong  faith  in  their  individual  judg- 
ments even  in  matters  affecting  their  daily  toil.  This 
was  due  to  the  fact  that  the  results  of  their  labors 
were  largely  beyond  their  control,  being  subject  to 
the  uncertain  variations  of  time  and  season. 

Note,  however,  that  with  the  rise  of  trade  and 
industry  there  was  a  rapid  increase  in  the  number  of 
men  engaged  in  these  new  forms  of  human  activities. 
Time  and  season  here  played  a  much  less  important 
part  so  that  the  results  of  man's  efforts  were  more 
assured.    And  since  a  given  effort  was  almost  in- 

47 


THE  ECONOMIC  BASIS 

variably  followed  by  the  same  result  man's  confi- 
dence in  his  own  judgment  grew  apace.  Again,  no 
longer  living  in  isolation  on  a  remote  fann  or  in 
some  small  village,  he  finds  his  confidence  strength- 
ened by  association  with  his  fellows  in  trade  guilds 
and  other  organizations.  Ere  long  this  confidence 
in  his  own  judgments,  in  regard  to  his  daily  activi- 
ties, extended  itself  to  the  domain  of  political  discus- 
sions and  beliefs.  The  old  psychology  which  was  the 
outcome  of  their  activities  in  a  feudal  agricultural 
economy  disappeared  in  time  and  in  its  place  we 
find  a  new  psychology,  with  its  more  confident  judg- 
ments, which  in  last  resort  was  the  outcome  of  the 
change  in  their  daily  activities.  It  is  not  here  meant 
that  no  other  influences  like  secular  and  religious 
education,  etc.,  played  a  part  in  effecting  this  change, 
but  since  man's  industrial  activities  occupy  so  large 
a  part  of  his  waking  hours  they  naturally  played 
a  most  important  part  in  this  change  in  his 
psychology. 

With  this  in  mind  let  us  now  recall  the  fact  that 
many  of  the  German  people  have  for  nearly  two 
generations  been  under  the  influence  of  a  great  in- 
dustrial movement.  That  this  has  effected  an 
important  change  in  their  psychology  is  shown  by 
the  rapid  growth  of  the  Socialist  vote  until  to-day 
48 


OF  AN  ENDURING  PEACE 

it  has  the  largest  representation  in  the  Reichstag 
of  any  single  party.  Again,  it  is  interesting  to 
note  in  this  connection,  that  the  delegations  from 
the  large  cities  and  industrial  centres  are  almost 
to  a  man  members  of  this  party. 

Why  then,  it  may  be  asked,  has  not  this  more 
modern  psychology  been  able  to  find  a  voice  with 
which  to  protest  against  all  the  horrors  that  have 
made  the  name  of  Germany  anathema  throughout 
the  civilized  world?  To  this  we  can  only  make 
answer  that  the  men  with  the  old  feudal  psychology 
are  still  in  control  of  the  German  government.  Nor 
is  there  any  immediate  prospect  of  unseating  them 
without  the  signal  defeat  of  their  armies  in  the  field 
and  such  action  on  the  part  of  the  Entente  Allies 
as  will  disabuse  the  minds  of  the  industrial  workers 
of  Germany  of  the  notion  that  the  Allies  seek 
the  complete  destruction  of  their  Fatherland.  To 
effect  this  some  assurance  must  be  given  that  when 
the  allied  people  are  satisfied  that  the  government 
of  Germany  is  firmly  lodged  in  the  hands  of  the  men 
with  the  modem  psychology,  that  country  will  be 
given  every  reasonable  chance  "to  multiply  and 
replenish  the  earth."  It  is  not  so  much  a  question 
of  the  form  of  government  which  they  may  see  fit  to 
install  but  rather  a  question  of  the  psychology  of  the 

49 


THE  ECONOMIC  BASIS 

men  who  are  to  direct  its  fortunes,  and  when  this 
change  has  been  surely  effected  there  should  be  no 
question  about  according  to  Germany  that  "  gener- 
osity and  justice  "  which  is  meted  out  to  all  other 
nations. 

It  may  naturally  be  felt  that  the  extension  of 
German  influence  through  Asia  Minor  to  the  Per- 
sian Gulf  might  seriously  jeopardize  British  inter- 
ests in  India.  But  while  this  is  quite  possible  it  does 
not  necessarily  follow  from  the  premises.  It  is 
interesting  to  note  by  what  a  curious  irony  of  fate 
the  present  ruling  classes  in  Germany  are  caught 
between  the  upper  and  nether  millstone.  On  the 
one  hand  they  are  forced  to  expand  industrially  or 
to  grow  in  wealth  and  population  in  order  to  protect 
themselves  against  outside  aggression.  On  the  other 
hand,  this  industrial  development  is  of  necessity 
breeding  men  with  the  modern  psychology  who 
sooner  or  later  will  unseat  the  very  men  who  have 
been  constrained  to  foster  this  growth  in  industrial- 
ism. And  so  the  old  German  saying  that  "  the  air 
of  the  city  breeds  freemen  '*  returns  Nemesis-like 
to  plague  them.  The  great  importance  of  adminis- 
tering a  signal  defeat  to  the  armies  of  Germany  at 
the  present  time  is  that  it  will  hasten  the  day  when 
the  reins  of  government  shall  pass  from  the  hands 
50 


OF  AN  ENDURING  PEACE 

of  her  feudal  aristocracy  to  the  hands  of  the  men 
whose  more  liberal  psychology  is  the  product  of 
modern  industrialism.  When  that  day  comes  Ger- 
many may  be  just  as  insistent  upon  her  place  in 
the  sun,  but  she  will  no  longer  insist  upon  foreclosing 
an  unfounded  claim  upon  the  entire  sun  and  so  will 
be  less  anxious  to  reach  England's  possessions  in 
India  or  to  construct  a  railroad  with  the  object  of 
attacking  these  possessions  by  an  overland  route. 

Here  again  President  Wilson  seems  to  have  seen 
the  truth  with  eyes  that  are  not  dimmed.  In  his 
Buffalo  address,  in  speaking  of  the  extension  of 
German  influence  through  the  Balkans,  Asia  Minor 
and  Mesopotamia  to  the  Persian  Gulf,  he  said:  "  If 
she  can  keep  that,  her  power  can  disturb  Europe 
as  long  as  she  keeps  it — always  provided,  for  I  feel 
bound  to  put  this  proviso  in — always  provided  the 
present  influences  that  control  the  German  govern- 
ment continue  to  control  it." 

Bear  in  mind,  it  is  not  here  proposed  to  at  once 
hand  over  to  Germany  the  valuable  lands  of  south- 
western Asia,  but  to  hold  these  lands  under  an 
**  international  guarantee  "  while  allowing  Germany 
to  develop  their  resources,  as  she  might  have  done 
imder  Turkish  rule,  so  that  the  liberal-minded  men 
of  Germany  can  see  some  hope  for  such  a  supply  of 

51 


THE  ECONOMIC  BASIS 

coal,  iron  and  grain  as  will  permit  her  to  make  a 
reasonable  growth  in  wealth  and  population.  Eng- 
land and  France  have  divided  a  continent  between 
them.  Why  then  in  the  interest  of  that  larger  civili- 
zation, which  alone  is  our  serious  concern,  should 
not  a  liberal  Germany  be  assured  of  like  supplies 
of  coal,  iron  and  food  if  it  can  satisfy  the  civilized 
nations  of  the  world  that  henceforth  it  will  abide  by 
the  rules  of  the  game? 

It  should  here  be  borne  in  mind  that  even  under 
the  worst  assumption  that  can  be  made  in  regard  to 
the  extension  of  German  influence  into  Asia  Minor 
and  Mesopotamia,  to  wit — that  it  shall  be  effected 
under  the  present  system  of  Prussian  militarism,  the 
results  could  not  be  a  more  serious  threat  to  modern 
civilization  than  would  arise  by  continuing  to  cut 
France  off  from  an  adequate  coal  supply  and  so 
leaving  her,  with  her  beggarly  17  billions  of  tons, 
impotent  alike  in  war  and  in  industry,  while  Ger- 
many with  her  409  billion  tons  would  continue  to 
grow  in  wealth  and  population  until  in  the  not 
distant  future  she  would  again  turn  and  rend  her 
foes  of  to-day,  and  so  quickly  conquer  the  hegemony 
of  Europe.  If  an  American  writer  may  presume 
to  do  so,  we  would  ask,  might  not  England  be  better 
off  with  an  assured  supply  of  food  and  the  friendship 
of  a  strong  and  growing  France  than  to  retain  her 
62 


OF  AN  ENDURING  PEACE 

hold  on  India  which  sooner  or  later  she  will  have 
to  defend  against  an  overland  invasion?  In  a  word, 
is  not  the  real  future  of  England  in  Africa  rather 
than  in  Asia,  especially  if  under  an  international 
guarantee  the  markets  afforded  by  the  teeming  mil- 
lions of  India  like  those  of  China  can  be  kept  open 
to  all  the  world? 

What  shall  we  now  say  about  M.  Cheradame's 
contention  that  "  the  Pan-German  Plot  (or  Plan) 
is  the  only  cause  of  the  war  "?  A  plot  that  "  is 
summed  up  in  the  formula — *  Hamburg  to  the  Per- 
sian Gulf,'  or,  if  you  like,  *  Le  Chemin  de  fer  de 
Bagdad.'  "  That  this  plot  or  plan  played  an  im- 
portant part  for  at  least  twenty  years  in  the  foreign 
policy  of  Germany  cannot  be  denied.  Again,  it 
must  be  admitted  that  if  she  wins  this  war  and  so 
succeeds  in  carrying  out  this  plan,  her  conquering  of 
the  practical  hegemony  of  Europe  would  seem  to  be 
imminent.  Thus  far  then  we  are  in  substantial 
agreement  with  this  most  interesting  writer^ 
Again,  it  must  be  remembered  that  M.  Cheradame 
is  actively  engaged  in  the  very  important  task  of 
trying  to  arouse  the  people  of  the  allied  nations  to* 
a  realizing  sense  of  the  great  danger  that  threatens 
our  modem  civilization  if  Germany  should  win  this 
war.  Some  allowance  must  be  made,  therefore,  for 
the  exigencies  that  confront  every  active  propagan- 
da 


THE  ECONOMIC  BASIS 

dist, — forcing  him  at  times  to  a  greater  simplicity 
of  statement  than  is  compatible  with  a  full  and  clear 
enunciation  of  all  the  factors  involved  in  the  discus- 
sion. This  indeed  is  in  agreement  with  his  conten- 
tion that  *'  the  allied  propaganda  should  be  founded 
upon  a  small  number  of  positive  arguments  "  (pp. 
216  and  230,  "  Pan-German  Plot  Unmasked  "). 

Now  as  a  method  of  fixing  the  attention  of  the 
public  mind  upon  the  vital  necessity  of  signally  de- 
feating the  German  armies  in  the  present  war  the 
declaration  that  the  Hamburg  to  the  Persian  Gulf 
scheme  is  the  sole  cause  of  the  war  has  the  advantage 
of  a  single  direct  and  readily  apprehended  state- 
ment. But  like  all  partial  truths  it  is  a  dangerous 
doctrine  to  impress  too  strongly  upon  the  public 
mind.  We  shall  therefore  endeavor  to  show  bv  ex- 
tracts  taken  exclusively  from  "  The  Pan-Geiman 
Plot  Unmasked  "  that  this  statement  does  not  con- 
tain either  the  whole  truth  or  even  the  more  funda- 
mental and  essential  parts  of  the  truth. 

On  page  48  he  quotes  from  the  May,  1915, 
"  Memorial  to  the  Imperial  Chancellor "  to  the 
effect  that  Germany  must  secure  the  coast  of  Bel- 
gium up  to  the  mouth  of  the  river  Somme.  "Again, 
besides  the  iron  district  of  Briey,  already  mentioned, 
the  coal  districts  of  the  department  of  the  Nord  and 
of  the  Pas  de  Calais  must  be  seized  "  .  .  .  or  "that 
54 


OF  AN  ENDURING  PEACE 

all  means  of  economic  power  which  exist  in  these 
territories  must  pass  into  German  hands/*  In 
brief,  in  the  event  of  a  German  victory  France  is  to 
be  stripped  according  to  this  memorial  of  all  its  coal 
and  iron  and  so  left  a  hopeless  prey  to  any  after 
aggressions  that  Germany  may  see  fit  to  visit  upon 
her.  Now  there  might  be  some  conceivable  excuse 
for  the  taking  of  the  Lorraine  ore-fields,  but  when 
you  remember  that  Germany  has  already  more  coal 
than  all  the  rest  of  Western  Europe  this  rape  of 
the  coal  field  of  northeast  France  seems  utterly 
heartless. 

That  these  memorialists  were  keenly  alive  to  the 
military  as  well  as  to  the  industrial  importance  of 
the  iron  regions  of  Lorraine  is  shown  by  the  follow- 
ing quotation  from  the  same  memorial:  "  If  the 
fortress  of  Longwy  with  the  numerous  blast  fur- 
naces of  the  region  were  returned  to  France,  and  if 
a  new  war  broke  out,  with  a  few  long-range  guns 
the  German  furnaces  of  Luxemburg  would  be 
paralyzed  in  a  few  hours  "  (page  47) .  It  then  con- 
tinues :  "  The  security  of  the  German  Empire  in  a 
future  war  requires  therefor  imperatively  the  owner- 
ship of  all  mines  of  iron-ore,  including  the  fortresses 
of  Longwy  and  of  Verdun,  which  are  necessary  to 
defend  the  region  "  (page  49). 

How  with  these  facts  fully  displayed  upon  his 

55 


THE  ECONOMIC  BASIS 

own  pages  M.  Cheradame  could  persuade  himself 
that  the  "  Hamburg  to  the  Persian  Gulf  scheme  " 
was  the  sole  cause  of  the  present  war  it  is  difficult 
indeed  to  understand.  For  the  carrying  out  of  the 
suggestions  in  the  above  "  Memorial "  would  abso- 
lutely destroy  the  power  of  France  and  so  would 
lead,  just  as  surely  as  any  railroad  from  the  North 
Sea  to  the  Persian  Gulf,  to  Germany's  conquering 
the  hegemony  of  Europe.  Nor  could  Germany  tem- 
porarily surrender  the  ore-lands  of  Lorraine  in  order 
to  secure  this  all-rail  route  and  then  turn  and  recon- 
quer the  Longwy-Briey  ore-basin  with  easy  facility. 
For  unless  she  secured  another  supply  of  iron-ore 
from  which  to  make  guns  and  munitions  she  would 
be  powerless  to  again  wage  effective  war.  The 
reader  can  bring  this  home  by  asking  himself  which, 
in  view  of  the  evidence  set  forth  in  this  "  Memorial," 
Germany  would  prefer  to  surrender:  the  Pan- 
German  plan  for  extending  the  future  power  of 
Germany  or  the  iron-mines  of  Lorraine,  which  by 
confession  are  imperatively  necessary  to  the  very 
existence  of  the  present  empire  of  Germany.  When 
you  have  answered  this  question  you  will  under- 
stand why  Germany  persisted  in  sacrificing  hun- 
dreds of  thousands  of  lives  in  the  vain  hope  of  captur- 
ing Verdun.  For  strip  Germany  of  75  per  cent,  of 
all  her  iron-ore,  and  the  curtain  will  soon  be  rung 
56 


OF  AN  ENDURING  PEACE 

down  upon  all  her  imperial  aspirations.  So  far  then 
from  being  the  sole  cause  of  the  war  "  the  Pan-Ger- 
man Plan  "  is  seen  to  be  not  even  the  most  important 
cause  of  the  war. 

From  this  same  "  Memorial "  M,  Cheradame 
quotes  the  following:  "  With  regard  to  the  East  the 
following  considerations  must  guide  us.  For  the 
great  increase  of  industrial  power  which  we  expect 
in  the  West  we  must  secure  a  counterpoise  by  the 
annexation  of  an  agricultural  territory  of  equal 
value  in  the  East.  It  is  necessary  to  strengthen 
the  agricultural  basis  of  our  national  economy;  to 
secure  room  for  a  great  German  agricultural  settle- 
ment." Again  Dietrich  Shaeffer  is  quoted  as  saying 
that  "it  is  absolutely  necessary  for  us  to  expand 
the  sphere  of  our  power  especially  eastward  .  .  . 
the  immense  Russian  force  must  recede  behind  the 
Dnieper."  * 

*  If  Germany,  under  the  present  collapse  of  Russia, 
should  succeed  in  extending  her  influence  as  far  as  the 
river  Don,  she  would  secure  control  of  the  most  valuable 
iron  deposits  in  all  Russia  together  with  coal,  manganese 
and  great  stretches  of  very  fertile  land.  This  would  assure 
her  an  adequate  supply  of  both  iron  and  grain  but  in  a 
way  far  more  threatening  to  the  rest  of  Europe  than  the 
permitted  extension  of  her  influence  through  the  Balkan 
states  into  Asia  Minor,  as  suggested  earlier  in  this  paper. 

57 


THE  ECONOMIC  BASIS 

Now  when  we  look  to  M.  Cheradame's  text  for 
a  solution  of  this  difficulty  we  get  nought  but  the 
following  rather  unsatisfactory  statement:  "  One 
aim  of  the  Pan-Grerman  plan  was  actually  to  put  an 
end  to  the  enormous  difficulty  which  Germany  has 
created  for  herself  by  the  hypertrophy  of  her  indus- 
tries and  thus  upsetting  the  proper  balance  which 
had  formerly  existed  between  her  agricultural  and 
her  industrial  production  "  ( page  41 ) .  In  brief,  it  is 
here  implicitly  stated  that  it  is  quite  legitimate  for 
England  and  France  to  expand  industrially  and  then 
seek  new  grain  fields  in  Africa,  but  that  Germany's 
industrial  expansion  is  hopelessly  im justifiable  since 
it  disturbed  the  nice  balance  between  her  population 
and  her  supply  of  food  and  so  created  the  "^  enor- 
mous difficulty  '*  for  which  she  alone  is  to  blame. 

We  cannot  fail  to  conclude  then,  from  the  evi- 
dence set  forth  in  this  "  Memorial,"  that  the  present 
war  is  not  due  solely  to  any  scheme  of  railroad  ex- 
tension to  further  the  growth  of  the  future  power 
of  Germany,  although  this  undoubtedly  played  a 
part  in  this  world  drama,  but  that  this  tragedy  is 
fundamentally  due  to  the  very  present  and  pressing 
necessity  to  provide  an  adequate  supply  of  iron  and 
food  to  permit  the  growth  of  G^ermany  in  industry, 
wealth  and  population.  As  this  involved  the  seizure 
58 


OF  AN  ENDURING  PEACE 

of  lands  held  by  other  nations  it  led  to  a  conflict  of 
interests  so  serious,  so  fundamental,  that,  as  men 
are  still  constituted  the  only  solution  they  could 
find  for  the  difficulty  was  in  the  arbitrament  of  war. 
In  a  word,  the  present  world  war  was  just  as  cer- 
tainly an  irrepressible  conflict  as  our  own  Civil  War, 
a  conflict  that  was  heightened  in  both  instances  by 
the  ambitions  and  arrogance  of  a  feudal  aristocracy. 
When  this  is  clearly  recognized  much  of  the  vehe- 
ment declamation  about  who  is  morally  responsible 
for  the  bringing  on  of  the  present  war  loses  its  force 
and  interest.  Again,  the  Pan-German  scheme  for 
an  all-rail  route  from  Hamburg  to  the  Persian  Gulf 
may  well  have  had  in  mind,  among  other  aims,  the 
relieving  of  this  pressure  of  population  upon  sub- 
sistence, etc.,  and  to  the  extent  that  this  was  true 
this  "  scheme  "  takes  its  place  as  an  occasion  rather 
than  as  a  cause  of  the  present  great  conflict. 

Throughout  this  paper  we  have  assumed  the  de- 
feat of  German  arms  as  a  necessary  premise  in  all 
our  arguments.  For  the  moment,  however,  with 
the  debacle  in  Russia  and  the  German  drive  in  Italy 
the  current  does  not  seem  to  set  very  strongly  in 
the  direction  of  a  victory  for  the  Allies.  With 
General  Pershing,  however,  we  are  disposed  to  hold 
that  the  notion  of  an  unbeatable  Germany  is  not  at 

59 


THE  ECONOMIC  BASIS 

all  justified  by  the  facts  of  experience.  For  when 
we  remember  her  undenied  corruption  of  Russian 
officials,  her  attempted  corruption  of  French  officers 
in  the  earlier  days  of  the  war,  and  the  charges  of 
similar  attempts  to  corrupt  Italian  officers  in  these 
latter  days,  why  should  we  credit  such  success  as  she 
may  have  had  entirely  to  her  military  prowess? 

In  the  meantime,  France  and  England  will 
unfortunately  be  forced  to  take  the  shock  of  the 
additional  forces  that  will  be  released  by  the  present 
collapse  of  Russia.  It  should  be  remembered  in  this 
connection  that  at  Verdun,  France  alone  sustained 
the  shock  of  a  large  part  of  the  German  Army.  It 
is  therefore  reasonable  to  assume  that  with  the  Brit- 
ish troops  that  are  now  available,  together  with  the 
great  supply  of  ammunition  that  is  now  on  hand, 
the  western  line  will  hold  fast  until  the  United  States 
can  come  to  their  assistance.  It  may  indeed  be 
necessary  to  postpone  any  great  allied  drive  until 
we  can  place  an  adequate  force  on  that  line,  though 
no  time  should  be  lost  in  the  performance  of  our 
part  in  this  effort. 

It  is  well  enough  for  German  writers  to  point 

to  the  limited  area  retaken  by  the  Allies  and  that, 

too,  after  prolonged  effort  and  enormous  sacrifices 

and  then  to  ask  how  long,  at  this  rate  of  progress, 

60 


OF  AN  ENDURING  PEACE 

will  it  take  to  reach  Berlin?  But  after  all  this  is 
but  another  case  of  German  camouflage.  The 
real  and  immediate  objective  of  the  Allies'  drive  is 
or  ought  to  be  to  secure  possession  of  the  Lorraine 
ore-mines,  since  without  them  it  would  be  impossible 
for  Germany  long  to  maintain  an  adequate  supply 
of  guns  and  munitions.  It  is  true  that  she  could 
still  import  ores  from  Austria  and  Sweden,  but  de- 
prive her  of  the  mines  and  blast-furnaces  of  Lor- 
raine and  the  end  of  the  war  will  not  be  far  removed. 
If  you  will  now  turn  to  our  map  of  this  region 
you  will  find  that  the  present  fighting  line  is  within 
23  miles  of  Longwy  and  less  than  17  miles  from 
Briey.  Note,  too,  that  the  frontier  line  which 
divides  this  ore-bed  runs  along  the  crest  of  a  ridge 
or  rather  an  elevated  plateau  from  300-600  feet  high 
and  that  the  only  considerable  break  in  this  ridge  is 
at  the  lower  end  where  the  River  Moselle  has  suc- 
ceeded in  cutting  its  way  through.  It  is  clear  from 
the  map,  however,  that  any  attempt  to  flank  the 
German  position  through  this  opening  in  the  hills 
will  be  confronted  by  the  fortifications  at  Metz, 
whose  great  guns  are  doubtless  trained  upon  this 
gap.  There  are  two  small  streams,  north  and  south 
of  Longwy,  that  find  their  way  through  this  ridge 
and  eventually  reach  the  Meuse.     South  of  Briey 

61 


THE  ECONOMIC  BASIS 

there  is  a  somewhat  larger  stream,  the  Orne,  which 
empties  into  the  Moselle.  As  this  narrow  valley  is 
traversed  by  a  railroad  it  would  seem  to  oiFer  some 
opportunity  for  a  flanking  movement.  The  avail- 
able maps,  however,  show  only  a  single  fort — Bat- 
tery Bous — confronting  this  pass  on  the  east,  which 
would  seem  to  indicate  that  for  some  reason  the 
Germans  are  not  very  apprehensive  about  any  move- 
ment through  this  narrow  defile  (Plate  II). 

Note,  too,  how  slight  is  the  gain  made  by  the 
French  on  the  line  from  Verdun  to  St.  Mihiel,  while 
to  the  southwest  of  the  former  as  to  the  southeast  of 
the  latter  the  Germans  have  been  driven  back  to  an 
ever-widening  distance.  The  holding  of  this  line 
from  Verdun  to  St.  Mihiel,  has,  as  we  know,  cost 
the  Germans  a  staggering  toll  in  human  life,  so 
testifying  to  the  great  importance  of  this  ore-field  in 
the  minds  of  the  German  strategists.  Here  then  in 
an  area  of  15  by  30  miles  we  would  seem  to  have  the 
real  crux  of  the  military  situation. 

So  long  as  the  Germans  can  divert  the  allied 
armies  from  laying  serious  siege  to  this  sector  of 
their  line,  by  carrying  the  war  to  more  northern 
points,  they  are  achieving  an  important  strategic 
success,  for  the  end  of  this  war  can  only  come  after 
the  capture  of  this  great  ore-basin.  The  enormous 
62 


Plate  II 


OF  AN  ENDURING  PEACE 

sacrifices  made  by  Germany  in  her  persistent 
attempt  to  capture  Verdun  should  give  us  some  idea 
of  the  toll  to  be  paid  by  the  Allies  before  Germany 
will  surrender  a  position  so  essential  to  her  survival. 
France  has  suffered  such  losses  in  her  defense  of 
Verdun  that  a  great  offensive  on  her  part  is  not  to 
be  considered  for  a  moment,  while  England  seems  to 
feel  that  she  has  all  she  can  do  in  defending  the 
channel  ports,  and  so  the  line  of  communication  be- 
tween France  and  England,  and  in  exterminating 
the  U-boats  from  their  bases  at  Ostend  and  Zee- 
brugge.  It  would  therefore  seem  that  the  task  of 
reducing  this  strong  German  position  will  have  to  be 
taken  over  by  the  American  troops  as  soon  as  they 
are  in  sufficient  force  to  undertake  this  very  serious 
bit  of  work.  I  feel  that  I  owe  an  apology  to  my 
military  friends  for  venturing  to  offer  a  layman's 
opinion  on  a  strictly  technical  problem.  Nor  would 
I  take  offense  if  I  heard  them  muttering,  sotto 
voce,  something  about  "  the  cobbler  and  his  last," 
and  yet  one  cannot  help  feeling  that  if  Germany 
were  deprived  of  75  per  cent,  of  her  iron-ore  the 
resistance  of  her  armies  must  rapidly  weaken. 

The  problem  confronting  the  Allies  is  therefore 
much  simpler  than  to  fight  kilometre  by  kilometre 
from  Lorraine  to  Berlin  against  an  ever-stiffening 

63 


THE  ECONOMIC  BASIS 

resistance.  And  yet  to  Berlin  the  allied  armies  must 
go  if  Germany  is  to  be  forced  to  realize  that  she  has 
been  hopelessly  beaten,  and  so  will  be  compelled  to 
agree  to  an  unconditional  surrender.  For  without 
such  a  surrender  the  enormous  sacrifice  of  life  and 
treasure  by  the  allied  powers  will  have  been  largely 
in  vain,  while  the  hour  hand  of  civilization  will  be 
set  back  by  many  decades. 

In  the  earlier  pages  of  this  paper  we  endeavored 
to  show  that  in  the  future  drift  of  historic  phenomena 
the  nations  of  Europe  are  likely  to  group  them- 
selves in  such  a  way  as  will  secure  to  each  group 
an  adequate  overland  supply  of  coal,  iron  and  food. 
The  objection  may  be  urged  against  this  that  it 
would  wipe  out  all  national  boundaries;  that  we 
are  in  this  war  to  help  preserve  these  boundaries, 
and  especially  to  protect  the  rights  of  the  smaller 
and  weaker  states  to  an  independent  existence.  If, 
however,  we  have  here  read  aright  the  signs  of  the 
times  it  may  be  difficult,  in  the  future,  for  any  small 
nation  whose  food  supply  is  not  assured  to  maintain 
a  wholly  independent  existence,  since  in  its  day  of 
trial  it  will  inevitably  be  forced  to  make  terms  with 
some  group  or  federation  that  can  protect  this  sup- 
ply. If  this  is  true,  then  one  of  the  gravest  problems 
confronting  the  Europe  of  the  future,  is  the  organ- 
64 


OF  AN  ENDURING  PEACE 

ization  of  these  great  federations  in  such  a  way  as  to 
protect  the  interests  of  the  smaller  states  from  the 
aggressions  of  a  Prussia. 

In  conclusion,  then,  we  would  again  urge  that 
in  all  attempts  to  formulate  the  terms  of  peace  we 
are  primarily  concerned  not  with  the  interests  of 
any  one  nation,  victor  or  vanquished,  but  with  the 
preservation  of  that  modern  civilization  which  is  the 
common  heritage  of  both  Europe  and  America. 
And  so  when  it  is  proposed  to  take  Palestine,  Meso- 
potamia and  Armenia  from  Turkey,  while  still  per- 
mitting her  to  retain  control  of  Asia  Minor  on  the 
ground  that  the  people  of  that  country  are  largely 
Turks,  it  seems  to  the  present  writer  that  in  this  over- 
insistence  on  the  idea  of  nationality,  we  are  losing 
sight  of  our  fundamental  proposition.  When  a 
people  has  ruthlessly  slaughtered  thousands  on 
thousands  of  Armenians  and  for  generations  has 
hindered  every  attempt  to  develop  the  country  in 
which  they  live,  what  shall  be  said  to  them?  Shall 
we  say,  "  Well  done,  good  and  faithful  servant,'*  or 
shall  we  not  rather  say,  as  was  said  to  him  who  kept 
his  talent  "  laid  up  in  a  napkin  .  .  .  from  him 
that  hath  not,  even  that  he  hath  shall  be  taken  away 
from  him  "?  And  so  we  would  add  to  our  general 
proposition  the  corollary  that  the  long-continued 

65 


THE  ECONOMIC  BASIS 

failure  of  any  people  to  develop  the  resources  of  the 
country  in  which  they  live  should,  when  feasible, 
work  a  lapse  of  their  title  to  that  country. 

In  a  word,  does  not  the  title  of  a  people  to  any 
country,  like  the  right  of  private  property,  rest  in 
final  analysis  upon  whether  or  not  such  use  is  made 
of  this  right  as  will  further  the  best  interests  of 
society  or  in  the  case  of  national  rights  the  best 
interests  of  our  modern  civilization?  For  it  is  only 
as  national  rights  and  national  boundaries  serve  this 
end  that  they  can  have  any  standing  in  the  final 
Court  of  Appeal.  Let  us  not  then  make  the  mis- 
take of  elevating  the  means  to  a  place  of  higher 
importance  in  our  scheme  of  thought  than  the  end 
which  it  must  subserve. 

In  the  very  near  future  no  one  will  insist  more 
strenuously  upon  the  importance  of  maintaining 
national  rights  and  boundaries  than  those  who  strode 
so  ruthlessly  across  the  borders  of  Belgium.  The 
sacredness  of  national  boundaries  will  undoubtedly 
be  urged  against  any  expropriation  of  the  western 
coal  lands.  So,  too,  it  will  be  maintained  that, 
the  Entente  Allies  having  laid  down  the  proposition 
that  every  people  should  have  the  right  to  determine 
to  whom  they  shall  owe  their  allegiance,  the  problem 
of  Alsace-Lorraine  should  be  left  to  a  plebiscite  of 
66 


OF  AN  ENDURING  PEACE 

the  people  living  in  that  country.  If,  however, 
those  who  shall  be  responsible  for  fixing  the  temis  of 
peace  will  hold  fast  to  the  proposition  that  all  ques- 
tiofis  must  be  decided  not  in  the  interest  of  any  one 
people  but  in  accordance  with  the  best  interests  of 
our  modern  civilization  as  a  whole,  and  that  national 
boundaries  are  only  important  as  they  minister  to 
this  endj,  there  will  be  little  difficulty  in  escaping 
the  pitfalls  of  this  German  camouflage.  It  is  not 
here  intended  to  minimize  in  any  way  the  importance 
of  preserving  national  life  and  boundaries,  but  to 
sound  a  note  of  warning  lest  we  shall  be  betrayed 
into  setting  the  tithes  of  mint,  anise  and  cummin 
above  the  weightier  matters  of  the  law. 

When  in  this  paper  we  have  urged  the  return 
to  France  of  Alsace-Lorraine  and  the  securing  by 
that  country  of  the  coal  lands  west  of  the  Rhine, 
we  have  not  rested  our  case  upon  the  great  and 
heroic  sacrifices  which  France  has  made  for  mod- 
ern civilization,  though  these  sacrifices  would  justify 
almost  any  claim  that  might  be  made  for  that  de- 
voted country,  but  have  on  the  contrary  rested  our 
claim  on  the  contention  that  without  the  natural 
resources  that  this  would  bring  to  France  that  coun- 
try cannot  hope  to  grow  in  wealth  and  population; 
and  that  without  a  great  and  growing  France  mod- 

67 


THE  ECONOMIC  BASIS 

ern  civilization,  for  which  she  has  made  such  enor- 
mous sacrifices,  will  again  be  seriously  threatened 
in  the  not  distant  future.  It  may  be  contended  that 
the  problem  of  to-day  is  to  fix  the  terms  of  peace  for 
the  present  war  and  not  to  rearrange  the  map  of 
Europe  in  such  a  way  as  will  bring  about  an  ideal 
distribution  of  its  natural  resources.  Now  if  one 
has  in  mind  an  armistice  or  any  other  temporary 
form  of  peace  we  must  admit  the  force  of  this  conten- 
tion, but  if  we  have  in  mind  a  "  lasting  peace  **  we 
must  confront  the  more  difiicult  problem  of  redis- 
tributing these  resources.  Nor  can  we  hope  to 
escape  this  task  for  any  long  time. 

When  one  has  in  mind  the  horrible  atrocities 
perpetrated  by  the  Germans  it  is  difiicult  indeed  to 
restrain  the  feeling  of  righteous  wrath  that  is  aroused 
in  the  hearts  and  minds  of  all  civilized  people,  and 
under  this  impulse  we  are  prone  to  cry  out  that  it 
shall  be  **  an  eye  for  an  eye  and  a  tooth  for  a  tooth  "  in 
the  day  when  these  barbarous  hordes  shall  be  driven 
to  the  other  side  of  the  Rhine.  While  for  men  like 
Tannenberg,  who  is  reported  to  have  said:  *'  The 
war  must  leave  nothing  to  the  vanquished  but  their 
eyes  to  weep  with,"  we  are  prone  to  cry  out,  so  let 
it  be  when  that  day  arrives.  Indeed  it  has  been 
urged  that  unless  the  Germans  are  treated  with  much 
68 


OF  AN  ENDURING  PEACE 

the  same  ruthlessness  that  they  would  have  employed 
had  they  been  the  victors,  they  will  fail  to  realize 
that  they  have  been  beaten,  since  to  their  minds  only 
those  have  "  the  will  to  conquer  "  who  are  willing  to 
go  to  any  brutal  length  in  the  punishment  of  their 
enemies.  But  whatever  our  feelings  may  be  in  the 
midst  of  war  all  this  must  be  set  aside  when  we  come 
to  discuss  the  terms  of  peace,  and  we  take  it  that  when 
that  time  comes  the  men  charged  with  the  grave 
responsibility  of  fixing  these  terms  will  be  so  sobered 
by  this  responsibility  as  to  purge  their  minds  and 
souls  of  all  vindictive  feeling.  "  Vengeance  is  mine, 
I  will  repay,  saith  the  Lord,"  is  the  spirit  that  must 
then  prevail  if  we  are  to  have  in  truth  "  a  lasting 
peace  based  upon  generosity  and  justice." 

Let  us  not,  however,  lose  sight  of  the  fact  that 
there  can  be  no  lasting  peace  without  the  destruction 
of  the  military  prestige  of  the  group  now  in  control 
of  the  German  government.  So  large  a  part  of  the 
German  people  are  dependent  upon  the  government 
for  their  livelihood,  whether  it  be  the  preachers  and 
teachers  or  the  laborers  (under  the  much  praised 
German  pension  system) ,  that  the  men  of  free  minds 
may  long  find  it  difficult  to  arouse  the  whole 
people  unless  their  faith  in  the  military  prowess  of 
the  Berlin  group  can  be  broken.     It  is  right  and 

6d 


AN  ENDURING  PEACE 

wise  to  try  and  win  over  the  German  people  by 
assuring  them  of  fair  and  rational  treatment  when 
this  horrible  incubus  has  been  forever  removed,  but 
let  us  not  hope  to  win  this  war  in  any  way  that  is  at 
all  worth  the  cost  in  blood  and  treasure  if  we  slacken 
our  efforts  to  destroy  the  brute  that  for  three  years 
has  run  riot  in  Belgium  and  northeast  France. 

In  brief,  this  war  cannot  be  won  by  the  German 
people  alone  and  unaided,  or  by  the  methods  that 
savor  of  passivism,  but  by  paying  our  toll  in  the 
prompt  and  energetic  prosecution  of  the  war  even  to 
the  last  dollar  and  man.  Any  negotiated  or  incon- 
clusive peace  will  only  give  Germany  the  time  she 
needs  to  prepare  for  a  still  greater  war  of  aggression. 
January  12,  1918. 


70 


LES  DEFENSES  DU  SANGLIER 

ou 
LA^LUTTE  POUR  LES  MINES  DE  WESTPHALIE 


PAR 

C.  W.  MACFARLANE,  Ph.D. 

EX-VICE-PRESIDENT  DE  LA  SOCIETE  DES  ECONOMISTES  AMERICAIN8 


PRESS  OF 

J.  B.  LIPPINCOTT  COMPANY 

PHILADELPHIA 
1915 


COPYRIGHT.  1915,  BY  C.  W.  MACFARLANE 
UNITED  STATES 


ACKNOWLEDGMENTS   FROM 
FRENCH    PUBLICISTS 

In  this  brochure,  "Les  Defenses  du  Sanglier," 
attention  was  called  to  the  fact,  that  as  long  as 
Germany  has  more  than  400  billion  tons  of  coal 
and  France  but  17  billion  tons  the  former  will 
continue  to  outstrip  the  latter  in  industry, 
wealth  and  population  and  so  in  another  fifty 
years  will  be  able  to  again  turn  and  rend  her 
foes  of  to-day,  even  though  she  suffers  a  signal 
defeat  in  the  present  war.  It  was  then  urged 
that  the  best  way  to  disarm  the  German  boar  is 
to  deprive  him  of  one,  at  least,  of  his  great  tusks 
— the  coal  deposits  of  Westphalia — below  will 
be  found  some  extracts  from  among  the  scores 
of  serious  and  appreciative  acknowledgments 
received  from  the  public  men  and  journals  of 
France : 

One  member  of  the  Senate  writes : — "  It  is 
remarkable  for  its  great  good  sense,  its  breadth 
of  view  and  the  soundness  of  its  judgments." 

An  important  minister  of  France  expresses 
himself  as  follows : — "  I  have  read  with  keen  in- 
terest your  brochure,  *  Les  Defenses  du  Sang- 
lier.'  It  contains  considerations  that  merit  the 
serious  attention  of  all  those  who  are  interested 
in  the  industrial  development  and  even  the  secur- 
ity of  France.  I  thank  you  for  having  sent  it 
to  me." 

A  member  of  the  Chamber  of  Deputies, 
trained  in  the  field  of  mining  and  metallurgy, 
writes  as  follows : — "  I  have  received  your 
brochure,  *  Les  Defenses  du  Sanglier,'  and  have 
read  it  with  very  great  interest.  I  am  studying 
at  this  time  the  metallurgy  of  Germany,  having 
just  finished  a  series  of  articles  for  '  Le  Corre- 
spondant '  on  *  Germany  and  Its  Iron.'  It  is 
sufficient  to  say  to  you  that  I  am  peculiarly 

73 


prepared  to  understand  the  great  importance  of 
the  suggestions  you  have  made  to  us.  Ger- 
many's abundant  supply  of  coal  has  undoubt- 
edly been  a  great  factor  in  her  attempt  to 
conquer  the  industrial  and  political  hegemony 
of  Europe." 

In  "  Le  Correspondant  "  of  May  10th,  1915, 
this  author  concludes  a  review  of  "  Les  Defenses 
du  Sanglier,"  with  the  significant  remark :  "  The 
counsel  has  been  received  and  will  be  remembered 
with  keen  appreciation." 

A  leading  Senator  of  France  takes  occasion 
to  write  the  following : — "  I  thank  you  sincerely 
for  your  communication  which  I  have  read  with 
the  greatest  interest.  I  will  keep  your  argu- 
ments and  conclusions  in  mind  when  the  terms  of 
peace  come  up  for  discussion  in  the  Senate  Com- 
mittee on  Foreign  Affairs." 

The  journals  of  France  gave  liberal  space 
and  serious  consideration  to  the  thesis  developed 
in  this  brochure,  in  some  instances  reprinting  it 
in  its  entirety.  A  great  journal  like  "  Le 
Temps  "  devoted  the  leading  editorial  of  April 
17th,  1915,  to  a  careful  examination  of  its 
arguments  under  the  title  "  Les  Problems 
Economique." 

After  reviewing  the  paper  in  some  detail  the 
editor  writes : — "  This  is  not  the  time  to  talk 
of  peace,  but  rather  to  give  battle  to  our  enemies 
and  in  any  event  an  agreement  would  have  to  be 
reached  with  our  allies  before  France  could  de- 
clare herself  on  so  important  a  matter.  He  then 
continues,  almost  in  the  words  of  the  brochure, 
— "  If,  however,  we  ignore  these  considerations 
the  most  signal  triumph  of  our  arms  in  the  pres- 
ent war  may  be  barren  of  all  permanent  advan- 
tage, leaving  us  exposed  in  the  not  remote  future 
to  the  redoubtable  revenge  of  the  vanquished 
in  this  struggle." 

74 


VALUE 
AND  DISTRIBUTION 

AN  HISTORICAL,  CRITICAL  AND  CONSTRUCTIVE 
STUDY  IN  ECONOMIC  THEORY 

ADAPTED  FOR  ADVANCED  AND  POST-GRADUATE  WORK 


BY 

CHARLES  WILLIAM  MACFARLANE,  Ph.D 


SECOND  EDITION 


PHILADELPHIA 
J.  B.  LIPPINCOTT  COMPANY 

1911 


COPYRIGHT,   1808,  BY  3.  B.  UPPINCOTT  COMPANY 


Electrotyped  and  Printed  by  J.  B.  Lippincott  Company 
The  Washington  Square  Press,  Philadelphia,  U.  S,  A. 


APPRECIATIONS  AND  CRITICISMS 

BY 

LEADING  ECONOMISTS 

"  From  the  standpoint  of  pure  theory,  this 
work  has  decided  value.  To  begin  with,  unlike 
many  writers  on  quasi-mathematical  economics, 
the  author  is  a  trained  mathematician.  This 
has  the  double  effect  of  making  him  sparing  in 
the  use  of  illustrative  formulas  or  diagrams,  and 
making  him  employ  correct  methods  of  con- 
struction in  those  which  he  does  use.  He  also 
has  an  amount  of  practical  good  sense  which 
prevents  him  from  leaving  his  theories  in  the  air, 
in  unverified  and  unverifiable  shape." — President 
Arthur  T,  Hadley  {Yale  University),  **  Yale 
Review"  August  ^  1899, 

"  To  the  large  body  of  advanced  students, 
whose  only  means  of  mastering  a  vital  phase  in. 
the  development  of  economic  thought  is  the 
laborious  study  of  a  scattered  controversial 
literature,  the  book  will  come  as  an  important 
aid  and  stimulus.  In  the  main,  the  volume  in  its 
arrangement  and  schematization  is  a  model  of 
clearness  and  scientific  order.  .  .  .  Both  as 
a  vigorous  criticism  of  recent  theories  of  value 
and  distribution,  and  as  an  independent  study 
of  certain  aspects  thereof,  the  book  is  a  stimu- 
lating contribution  to  economic  literature." — 
Prof,  J.  H.  Hollander  (Johns  Hopkms  Univer- 
sity), "Annals  of  American  Academy t**  July, 
1899. 

"  This  work  is  a  valuable  contribution  to  the 
literature  of  economic  theory  .     .     .     Perhaps 

77 


the  most  interesting  and  important  point  in  the 
author's  critical  discussion  of  other  theories,  and 
the  one  in  which  his  own  contribution  to  eco- 
nomic thought  is  the  largest,  is  his  treatment  of 
rent  and  profit.  .  .  .  The  work  will  be 
valued  by  all  who  appreciate  the  importance 
of  clear  thinking  concerning  the  laws  of  distribu- 
tion."— Prof.  J.  B.  Clark  (Columbia  Univer- 
sity), "  Political  Science  Quurterli//'  September, 
1899, 

After  criticising  Prof.  Marshall  (Cambridge) 
for  losing  himself  in  the  mists  of  normal  value 
and  free  competition,  Charles  S.  Devas  contin- 
ues as  follows :  "  That  these  mists  need  dispelling 
even  on  the  west  of  the  Atlantic  is  seen  by  the 
example  of  so  able  a  reasoner  as  Dr.  C.  W. 
Macfarlane  in  his  volume  on  '  Value  and  Distri- 
bution.' For  after  admirably  recognizing  the 
need  of  bringing  economic  theories  into  harmony 
with  facts,  and  the  utter  collapse  of  the  ideal  of 
free  competition  that  seemed  to  Mill  about  to 
be  realized;  after  many  brilliant  criticisms  and 
valuable  contributions  toward  a  proper  theory 
of  monopoly  he  too  loses  himself  in  a  mist.   .   .   . 

"  But,  lest  I  be  totally  misunderstood,  let 
me  repeat  that  I  am  not  complaining  of  the  two 
writers  just  mentioned  as  if  they  ignored 
monopolies ;  on  the  contrary,  as  already  indi- 
cated, they  are  among  the  foremost  of  those  who 
have  dealt  with  the  new  problems  that  face 
us." — Charles  S.  Devas  (Bath,  England),  "  In- 
ternational Journal  of  Ethics,"  October,  1901, 

Professor  Bohm-Bawerk  likewise  files  an  ex- 
ception as  when  he  writes :  "  Professor  Marshall, 

78 


however,  and  with  him  all  those  scientists  (as, 
for  example,  in  former  times  John  Stuart  Mill 
and  Jevons,  in  our  day  Macf  arlane,  and  indeed 
also  Carver),  who  have  considered  the  psycho- 
logical fact,  introduced  into  the  science  by  Rae 
and  Jevons,  of  the  smaller  estimation  of  future 
pleasures  and  pains  as  identical  with  the  recog- 
nition of  the  abstinence  theory,  makes  an  addi- 
tional error,  in  that  he  fails  utterly  to  see  that 
a  choice  must  here  be  made  between  two  con- 
cepts which  cannot  possibly  exist  side  by 
side." — Prof.  Eugene  von  Bohm-Bawerk  {Uni- 
versity of  Vienna) y  "  Recent  Literature  on 
Interest.*' 

"  I  spoke  to  Bohm-Bawerk  a  few  days  ago 
about  your  book.  He  thinks  you  are  right  in 
some  of  your  criticisms  of  his  theories,  and  says 
that  he  will  take  them  into  consideration  in  the 
second  edition  of  his  work  now  in  preparation. 
I  congratulate  you  very  heartily  upon  your 
great  success,  and  expect  to  avail  myself  of 
several  parts  of  your  work  in  the  next  edition 
of  my  '  Grundriss.'  " — Prof.  Eugene  von  PhUlip- 
povich  {University/  of  Vienna). 

"  I  have  read  your  book,  '  Value  and  Dis- 
tribution,' with  great  interest.  I  am  just  now 
engaged  upon  a  new  edition  of  my  work  on 
*  Capital,'  and  shall  there  take  occasion  to  dis- 
cuss some  questions  which  your  book  has  sug- 
gested to  me.  In  many  points  I  must  agree 
with  your  opinions." — Prof.  Eugene  von  Bohm- 
Bawerk  {University  of  Vienna). 

"Dr.  Macfarlane  leads  up  to  his  own  theories 
by  improving  upon  the  theories  of  his  prede- 

79 


cessors.  Many  of  his  criticisms  appear  to  us 
very  just  and  instructive.  .  .  .  Contending 
with  the  great  Austrian  leader  (Bohm-Bawerk) 
on  the  theory  of  interest,  Dr.  Macfarlane  ap- 
pears to  us  to  be  victorious  all  along  the  line." 
— Prof,  F.  S.  Edgeworth  {Oxford  University), 
"  Economic  Journal"  Jime,  1899. 


CONTRIBUTIONS  TO 

ECONOMIC  LITERATURE 

BY  THE  SAME  AUTHOR 

THE  GENERAL  DOCTRINE  OF  RENT  IN  GERMAN 
ECONOMICS 

RENT  AND  PROFIT 

DISTRIBUTION  BY  A  LAW  OF  RENT 

THE  PENNSYLVANIA  PAPER  CURRENCY 

THE  PRIMARY  LAWS  OF  SOCIAL  EVOLUTION 

VALUE  AND  DISTRIBUTION 

THE  PLACE  OF  PHILOSOPHY  AND  ECONOMICS  IN 
THE  CURRICULUM  OF  A  MODERN  UNIVERSITY 

THE    ECONOMIC    INTERPRETATION     OF    EARLY 
ROMAN  HISTORY 

LES  DEFENSES  DU  SANGLIER 

ETC.,  ETC.,  ETC. 


THIS  BOOK  IS  DUB  ON  THB  LAST  DATE 
STAlilPBD  BBLOW 

AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
TH^S  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  SO  CENTS  ON  THE  FOURTH 
DAY  InD  TO  $1.00  ON  THE  SEVENTH  DAY 
OVERDUE. 


m    28  1943 


LD  21-100m-7,'40  (6936s) 


t^ 


L 


392388     A'/^ 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


